If streaming video is next, how would Apple go about doing it? It could develop the service in-house while acquiring or partnering with content companies, or do so via an acquisition.
Many investors think Apple could buy Netflix (NFLX). But with a market cap of $21 billion -- and Apple would have to pay a premium over that -- and an incredibly high valuation, the deal is as unlikely as ever.
Especially when you consider that the penny-pinching Apple just made its largest acquisition ever at only $3.2 billion -- that is, if the deal goes down.
Hulu is another video streaming service and considered by many as the runner-up behind Netflix.
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Last June, rumors circulated that a deal was nearly complete for its owners -- Disney (DIS), Comcast (CMCSA), and Twenty-First Century Fox (FOXA) -- to sell Hulu to a number of different bidders. Reportedly, the figure was just over $1 billion.
The deal never got done. But for a company like Apple, $2 billion for a video streaming company is easily doable.
If Apple is indeed working on a set-top box for the TV (separate from the current Apple TV), streaming video and streaming music could be huge for the tech giant.
Whether it's cheaper for Apple to develop in-house or acquire a company like a Hulu, I'm not sure. But the three owners of the latter have seemed almost anxious to unload the asset, as they have now tried to sell it twice before pulling out of negotiations.
When the deals have fallen through though, Disney, Comcast and Fox have infused cash into Hulu to continue making it a more attractive platform for users.
Only Apple will know which company to go after, if any, but don't be surprised if it finds a way to disrupt video and music streaming in the not-so-distant future.
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At the time of publication, the author was long Disney but held no positions in any of the other stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.
-- Written by Bret Kenwell in Petoskey, Mich.