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Apple TV and the Bid to Control Content

Stocks in this article: AAPL TWX DIS VIA.B

NEW YORK ( TheStreet) -- Apple (AAPL) may be focusing on its software and services more than anyone thinks. Except CEO Tim Cook, who thinks software and services can play a major role for the tech giant.

Citing unnamed sources, Quartz reported the Cupertino, Calif.-based Apple is reportedly working on getting content from content providers for its television service, which could potentially include the long-awaited Apple television set.

Quartz reported that Apple is in talks with Time Warner's (TWX) HBO, Walt Disney's (DIS) ESPN, and Viacom (VIA.B) to bring the content to a future television platform.

Apple recently amped up its offerings on its Apple TV set-top box, but going straight to content providers on bringing content over the Internet is very similar to what Intel (INTC) is trying to do with its Intel Media group, though neither company has been able to crack the market as of yet. Google (GOOG) is also working on a similar service.

In the past, Cook has said that Apple is more than just a hardware company, that its software and services are a major factor as well. Speaking at an investment conference in February, Cook highlighted the importance of Apple's software and services.

"Because we're not a hardware company, we have other ways to make money and reward shareholders," Cook said, mentioning Apple's software and service revenue in its fiscal first quarter.

Cook has continued to hammer home the importance of software and services, when traditionally Apple has been thought of as a hardware company. On Apple's fiscal second-quarter earnings call, Cook mentioned that Apple has new products coming in the fall and 2014, and they aren't just a new iPhone or iPad.

"Our teams are hard at work on some amazing new hardware, software, and services that we can't wait to introduce this fall and throughout 2014," Cook said, highlighting such products as the App Store, iTunes, and iCloud.

With Google having talked to the NFL about bringing NFL Sunday Ticket to its platform, it makes sense that Apple would also go the route of talking to content providers and skip out on the cable companies. Apple is fighting to increase software and services revenue, which rose 25% year over year last quarter to $3.99 billion. A move to bring content straight to its platforms would enhance revenue as the tech titan could charge fees to its users for the content, similar to what cable companies do with their cable packages.

The war for content continues to wage on, and it looks as if Apple is going to really enter the fray. With its $146.6 billion in cash and cash equivalents on its books, the tech titan should not be counted out from capturing a piece of this pie.

Just don't expect the cable companies to go down without a fight.

-- Written by Chris Ciaccia in New York

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