The seemingly endless saga of an Apple TV took another twist recently with some fresh reporting from the Wall Street Journal that indicated that Apple was in talks with cable companies to offer - wait for it - a set top box.

So what happened to the 'iTV' we were promised?

Well, the reports are vague, naturally, but the idea appears to be that Apple would offer a beefed up version of its Apple TV set top box provisioned for a cable provider's services. This functionality may, eventually, be packaged into a TV as well, but reports from senior Apple executives poured cold water over arrival of such a product in the short term.

More importantly, the idea that Apple would pair up with a cable company poured gallons of cold water over the idea that Apple was about to upend the TV business just like iTunes upended the music business.

If You Can't Beat 'Em...

Rather than upend the existing TV market, Apple appears to be (grudgingly) working within its parameters.

As the news of an Apple cable TV box filtered out, some observers spied a replay of Apple's successful assault on the mobile phone business. There, Apple had to swallow some compromises to gain access to a national cellular carrier but once they established their foothold, they enjoyed meteoric success. Why shouldn't Apple make a "deal with the devil" (i.e. the pay TV providers) to gain even wider access into the consumer's living rooms? Indeed, as the WSJ piece indicated, this is precisely why the cable companies have been reluctant to engage Apple, noting that "cable operators in the past were worried that Apple could erode their relationship with their customers if Apple had a role with the box."

But there's a limit to the damage Apple can do here. Apple's success in mobile has not transformed them into a virtual phone operator (despite the damage iMessage is doing to carrier's exorbitant SMS fees). Likewise, changing a cable operator's channels into apps on an elegant user interface is not going to turn Apple into a pay TV provider - they won't own the rights to the content and won't control the network delivering the content into your home. Those are the keys to the TV distribution puzzle that no amount of technological wizardly can crack.

In reality, an Apple tie-up may serve the pay TV providers well. First, it would align them with a marquee brand. Today, the only set top box with any name recognition is TiVo. While big time tech brands like Cisco and Motorola are leading set top box makers, no one shops for their TV service based on what kind of home hardware they'll receive (Dish, interestingly, is trying to change that with their Hopper campaign but it's too soon to tell if that particular gambit is working).

Now imagine your cable company was shopping around Apple gear instead. It would, at a minimum, get people to pay attention. As in the mobile phone market, offering Apple set tops in a portfolio could differentiate a pay TV provider. More substantively, Apple's experience designing compelling interfaces would undoubtedly serve pay TV providers, who have not exactly knocked that ball out of the park.

If Apple sold the device through its online store and other retail outlets, it would also alleviate the cost burdens for pay TV providers, who need to underwrite the expense of installing and servicing your home hardware. Better to deal with the Apple Geniuses then the Cable Guy.

In other words, an Apple TV set top box may not be as Earth-shattering as the early dreams of an iTV had promised, but it can still shake things up to benefit of everyone. Cable companies get a better user interface and some name brand clout, Apple gets another significant toe-hold into the living room and greater experience working with live TV content. Consumers get additional set top box competition.

But not everyone wins in this scenario. The aforementioned set top box champions would be mighty nervous. Motorola and Cisco are already rumored to be looking for place to off-load their set top box businesses. An Apple entry into the market could knock them out entirely. One need only look at what Apple has done to the fortunes of mobile handset makers like HTC and Nokia to understand the fear that would grip the set top box industry if Apple ultimately does take the plunge.

So TV fans, you may not be able to cut the cord just yet, but at least you may get a better device to dangle on the end of it.