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Apple online TV service delayed until 2016

Apple is set to delay the launch of its long-awaited online TV service until at least next year, according to sources close to the matter.

The technology giant planned to unveil the service at a company event on 9 September, but will now have to hope fans are satisfied with news of its upcoming iPhone 6s handsets.

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Reports indicate that negotiations with content providers have gone less well than hoped, causing the delay. Apple had been in discussions with CBS, NBC and Fox, but disagreements over pricing have emerged. The Cupertino-based firm wants to provide consumers with a collection of popular packages for $40 a month, but this is significantly cheaper than the average US cable TV bill.

Bloomberg is also reporting that Apple has serious concerns regarding its network capacity and whether it would be able to deliver a reliable online service. Apple’s four data centres, based in California, Nevada, North Carolina and Oregon would not be able to provide a high quality streaming service to the whole of the US and a larger network of servers would likely be required.

“Apple could send every bit from one central point, but the bandwidth costs would be exorbitant,” explained Nick Del Deo, an analyst at Moffettnathanson. “Plus, the service would be terrible.”

Last year saw rumours of a deal being struck between Apple and Comcast that would allow the former company to bypass Internet congestion, but more recently, industry analysts have focused on Apple’s partnership with a content distribution network called Akamai Technologies. Apple is already Akamai’s largest customer and could utilise the firm’s network of 170,000 servers to support its online TV service.

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Apple will be keen to resolve the delay quickly to avoid its competitors in the online TV market gaining further ground. In the meantime, the company is busy rectifying a problem with its third-generation Apple TV sets, offering customers a free exchange after a faulty part was discovered.