Apple (s aapl) could be ready to upend the living room entertainment market in a way none of its previous products have managed to do, if a new report (via International Business Times) by research firm Jefferies & Co. is accurate. Jefferies analyst Peter Misek thinks Apple is about ready to launch a brand new cloud-based video service that could go well beyond what the current Apple TV already offers.
Misek’s prediction is based on checks with developer and content providers over the past couple of weeks, and also the impending launch of the massive new North Carolina Apple data center, which is set to become operational this spring, according to Apple COO Tim Cook. Misek also believes Apple could be involved with additional planned data center builds in other parts of the U.S., though ownership of these facilities can’t yet be definitely linked to Apple. Apple does appear to be doubling the originally intended size of the North Carolina center, according to earlier reports.
One last indicator that Apple has big plans for cloud TV, according to Misek, is that some major content providers are eager to have their material removed from potentially competing services:
We find it notable that the content companies, citing a lack of domain license, asked Cablevision (s cvc) sto remove channels from its iPad app. We believe these same companies are negotiating some sort of deal with Apple.
The picture Misek paints of a potential cloud-based TV service from Apple is certainly an appealing one. It would offer Apple TV-like features, but also the ability to easily move content between Apple devices, including the iPad, iPhone, and iPod touch. And if content companies really are balking at the efforts of others to bring their shows to Apple products, it could mean that the Mac-maker has possibly negotiated a far-reaching content license across its platforms with some.
Misek also thinks a new piece of hardware will accompany the introduction of the new cloud-based video service, but he makes no firm predictions about what such a device might look like. Regardless of whether Apple introduces new hardware, or just updates the existing Apple TV (which should be up to the task, especially given Apple’s introduction of live streaming video offerings on the set-top device), a new streaming TV service could be the game-changer the video market’s been waiting for.
All Apple has to do with such a service is provide exactly what cable and satellite don’t: a highly customizable, on-demand and live streaming hybrid with a total focus on consumer choice. In short, Apple just needs to give TV the App Store treatment. Of course, that’s much easier said than done, as licensing deals would make such an offering a nightmare from a negotiations standpoint.
Difficulty in negotiating content rights might be why Misek predicts we won’t see the introduction of such a service from Apple until 2012 or 2013, with an initial domestic launch followed later by an international rollout. Apple is lucky that Google TV (s goog) didn’t end up living up to customer expectations, but if it does intend to go this route, it will face increasing competition from Netflix (s nflx), and from cable TV providers which appear to be getting over their fear of TV not restricted to the physical television itself. The window during which a cloud-based, cross-device TV service offering will be disruptive is closing fast.