Apple Inc. is reportedly in talks with Comcast Corp. to provide high-quality, streaming television content through the Apple TV box, the latest sign of the Cupertino, Calif., tech giant's continued interest in changing how we watch TV in the same way the iPhone changed the way we use cellphones.
Negotiations are in the early stages, and many challenges remain to complete the deal, The Wall Street Journal reported, citing people familiar with the matter.
But Apple has long had interest in the television industry, with the company rumored to be working on everything from its own flat-screen television to upgraded versions of its Apple TV box to new ways to control TVs with iPhones and iPads.
Apple's strength in combining hardware and software to produce an easier-to-use experience for consumers has fueled intense interest in its plans for TVs, which are plagued by complicated remotes, complex program schedules and convoluted instructions to connect televisions and speakers and receivers together.
"This is going to be the next evolution as the Apple television at some point will be launched not just as a TV box, but a revolutionary way to [experience] home entertainment," said Laurence Balter, chief market strategist with Oracle Investment Research in Hawaii. "Right now, they need to corner the market on content. If they didn't do this [with Comcast] and suppose they launch their TV set, everyone would watch Netflix, and Apple wouldn't get a penny. This is about keeping the revenue stream flowing in their direction."
The partnership would essentially take the place of the traditional cable set-top box and allow users to stream live and on-demand TV programs and digital-video recordings stored in the cloud to all their Apple devices. It would also provide a high-quality streaming service and not suffer the hiccups or buffering that can happen when streaming Web video, according to the Journal report.
If Apple and Comcast -- the nation's largest cable company -- team up, analysts say, the deal could be huge for Apple and Comcast customers and should strike fear into the Netflixes and Hulus of the world.
"This is all about keeping Apple users inside the ecosystem and revenue that would normally go to a Netflix or Hulu into Apple pockets," Balter said. "It's about the ability to sync between all your devices and watch Comcast, which drives a stake right in the heart" of the Netflix business model.
Apple stock gained $6.32 to close at $539.19, while Netflix shares fell $27.09 to $378.90.