By Sinead Carew and Edwin Chan
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Jobs has called Apple TV -- a 4-inch-square box launched in 2006 that connects your plasma or LCD TV to the Web -- a hobby, but it is also one of the rare missteps in the course of Apple's meteoric ascendance.
If Cook can succeed where Jobs has failed, he would put to rest questions over whether he has the vision to lead Apple, in addition to widely respected operational skills.
"The TV is the obvious gap in Apple's product line up," CCS Insight's John Jackson said. "There's pressure to constantly innovate, (but) there's more than sufficient momentum at Apple right now that they don't need to reinvent the movie screen the TV, the car or the horse and buggy in the immediate term."
Getting Internet programing off computers and onto television sets has long been viewed as the next big thing for consumer technology companies, but none has succeeded so far with a product that has gained wide appeal.
"The Holy Grail is the living room," said David Rolfe at Wedgewood Partners, which devotes 9.5 percent or about $1 billion of its portfolio to Apple. "They would get into it, only if they can make a significantly better product than what currently exists."
It remains far from clear what Jobs -- and now Cook -- intends on the TV front. There are persistent rumors that Apple may produce an actual television to go along with content in an iTV, as part of the ongoing debate over whether the beleaguered television industry is ripe for an Apple-style shake-up.
The current market offers a confusing array of options -- from video streaming through game consoles like Microsoft's Xbox to Google-powered TV sets from Sony, Samsung and others.
Analysts estimate Apple takes roughly five years to develop a wholly new product, so either Jobs has already started down the TV road or Cook needs to start thinking now.
Chief among the obstacles would be concerns in the entertainment industry about potentially aggressive video licensing terms that Apple would seek -- and has gotten in the past for music and video licenses on iTunes. Executives say Apple had asked for 30 percent of rental fees for iTunes, which is blamed for smothering the music recording industry.
Jobs' charisma and negotiating power were crucial to the launch of iTunes in 2009 and the then-unprecedented sale of songs rather than albums on the Web. Cook remains untested on this front, despite his deft hand dealing with the supply chain partners that make Macs, iPhones and iPads.
"It was Steve's rock-star status that convinced these guys, they were in awe of him," said a former major recording label executive involved in the negotiations before iTunes was launched. "Without him Apple would never have been able to pull off that deal."
THE ROLE OF CHARISMA
There's some evidence that Cook can be as tough at the negotiating table. Peter Misek at Jefferies cites Cook's command of the iPad 2 rollout, and his firm stance this year when the Japan earthquake and tsunami threatened to turn off one of the world's largest semiconductor-component spigots.
"Cook was able to double or sometimes triple source component suppliers," Misek said. "To date, no competitor has been able to gain meaningful share in the tablet market and ... Cook's leadership during the introduction was critical to this."
Now, the former Compaq executive needs to prove that he can not only execute his boss's vision and keep Apple's fabled product pipeline alive, but that he can also make that intuitive leap to tell consumers what they want.
Wall Street will be watching.
"The market and the organization needs to see that Tim has the judgment to pick a winner," said Jane Stevenson, vice chairman of Board and CEO Services at Korn/Ferry International.
"The market will need to see a continued stream of innovation that has his fingerprints on it," ranging from launching new products to turning around products that haven't much success, like Apple TV.
(Additional reporting by Poornima Gupta and Sarah McBride in San Francisco and Yinka Adegoke and Jennifer Saba in New York, editing by Tiffany Wu; Phil Berlowitz)