Why Apple is keeping an eye on TV brand

The next big Apple product is on its way. The first hard evidence of its existence emerged in Walter Isaacson’s revealing biography of Steve Jobs late last year. Apple’s late founder made it clear that he was working on an “integrated television set” that was “completely easy to use” and which would seamlessly synch with other devices and the internet.

Jobs told Isaacson that he had “already cracked it” and since that interview became public, various analysts and bloggers have speculated on when and what Apple will bring to the market. The consensus appears to be a 42-inch flatscreen, controlled by voice or iPhone, featuring apps and networked programme content that will retail for £951 and hit the shelves by Christmas 2012.

But it’s not the technical specs or product launch that will intrigue marketers. The big question is what Apple will call the new device.

Surely, it’s obvious, isn’t it? It will be called the iTV. And therein lies a problem because since 1955 that name has belonged to the ITV network and since 2004, with the merger of Granada and Carlton, to ITV plc. Adam Crozier is its CEO and he warned Apple off the name when he took charge in 2010. The big branding question is will Apple heed that warning?

It could follow the lead of RIM, which changed its original plan to name its new mobile operating system BBX, instead choosing BlackBerry 10 because the BBX acronym was already owned by a software firm in New Mexico.

This would certainly prove to be the easiest solution for Apple but it also looks the least likely given the company’s consistently dogged approach to brand naming. Apple has fought vehement litigious battles against the likes of Cisco and Amazon to own the naming rights to everything from iPhones, iPads and even the term “app”. ITV isn’t going to dodge the branding bullet that easily.

A compromise option would see Apple use the name iTV in most countries and opt for an alternative brand name in markets where ITV owns the naming rights. This is a more common strategy than most consumers appreciate. In Australia, for example, Burger King trades as Hungry Jack’s because a local Adelaide restaurant originally owned the rights to the Burger King name. Despite eventually acquiring the Burger King naming rights in Australia, the restaurant chain has retained the Hungry Jack’s name because of the residual brand equity that two decades of marketing has created.

Another example is Budweiser. Czech brewer Budějovický Budvar holds the rights to the Budweiser name in much of Europe, which means the US beer brand is marketed as Bud in much of the EU and Anheuser-Busch B in Germany.

This kind of geographic solution is unlikely to appeal to Apple because it is a brand that positions itself on simplicity and revels in its global appeal. Add to that the fact ITV may well have registered its name in territories beyond the UK and this option looks even more unlikely.

And this brings us neatly to the most intriguing potential outcome - Apple buys the iTV brand name.

There are two ways this can happen. Crozier can sell Apple the naming rights and then rebrand his own organisation using an alternative title. This is a painful and long drawn out process for any listed company but in ITV’s case there are a number of suitable brand names, like Granada or Carlton, that could be used. There would also be considerable consolation for ITV in the multimillion pound settlement that Apple would have to offer it in exchange for the brand name.

The problem for ITV is that Apple will be in a hurry to buy the name in time for this year’s launch. That means there will not be enough time for ITV to slowly rebrand under an alternative name using a gradual endorsement with the ITV masterbrand that most experts would recommend in this kind of situation.

So what if Crozier rejects Apple’s enquiries completely? There is an outside chance that Apple could just buy the whole company outright. These days, ITV is a well-run business with very little debt, a market capitalisation of £3bn and 2011 earnings likely to be close to £500m. That’s an attractive multiple and it’s also a price tag that cash-rich Apple would not even blink at paying. Add the synergies of its extensive programme library and the idea of buying ITV is not impossible to envisage.

Right now, a team of Apple finance jocks may well be running over the ITV books and contemplating an offer. Buying a company to get the brand is not that rare. Usually it’s the brand equity, the awareness or the heritage that drives the acquisition, but on rare occasions it’s the desire for a brand name itself that creates the demand to buy a business.

Who could have known a lifetime ago that a three-letter acronym would one day draw the attention of the 21st century’s hottest technology company? ITV or iTV? Watch this space.