Where Apple built a better computer, but lost out to more modular and less expensive IBM-compatible machines, Tivo’s superior user experience may not be able to hold off the lower-price and convinience consumers get when they sign up for DVR service from their existing cable companies. A great user interface, as Apple learned, isn’t enough to stave off competition at a lower price point.

There are some signs that Tivo execs understand this, but is it too late for Tivo to move away from a properietary software model? Some investors think so.

To put this in the terms of Clayton Christensen, where Tivo has been a disruptive technology relative to traditional television, the cable companies are disruptive to Tivo with a “good enough” service at an attractive price. For the cable companies, it’s also a sustaining business model — improving service for its best customers. And as Christensen would note — established companies win sustaining battles with start ups every time.

Apple survived serving a niche market and with a cult aura. But there could also be some very different dynamics at play. For example, there is no evil empire gunning for Tivo the way Microsoft went after Apple, so the Tivo cult may not be as energized, and therefore more readily switch to another product when other services eventually become as good as Tivo. On the other end, nobody ever “Mac’d” a spreadsheet they way consumers “Tivo’d” “The West Wing.” The word “Tivo” may have permenantly entered our lexicon for DVRing in a way that will survive the company. Unfortunately, there’s no money in a great brand name if there’s no product to leverage it.