The physical product is already taking shape.

Think Retina screens in a variety of sizes, up to 40 inches across or more, with the highest possible aspect ratios, brighter than any screen on the market. The new iMac already sports a 27-inch screen, with a full computer inside it, WOOD-TV priced at $1,999. Take the computer out and put that money into the screen.

Imagine a high-capacity DVR inside that screen, connected to the cloud for unlimited choice in programming, with your current iMac, iPhone or iPad used as the "clicker" and WiFi as the glue connecting it all. Now imagine a business model that gives you any programming you want, when you want it, at a fraction of the cost of your existing cable bill.

For a channel like AMC this might be a premium price, compared with what cable subscribers pay. But for subscribers who don't like sports it's a huge savings.

Can Google or Amazon follow Apple through such a market opening? No doubt they could. But they will be followers. It will take something huge to blow through the existing cable business models, and only Apple can offer that something.

My guess is that's what Cupertino is working on right now. It's negotiating with Hollywood, not Korean parts makers.

At the time of publication, the author was long AAPL and GOOG.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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