NEW YORK (TheStreet) -- Arris Group (ARRS) stock was down in trading Monday falling 5.7% to $28.03. The drop for the telecom equipment manufacturer comes after rumblings of news that Apple (AAPL) was in talks with Comcast (CMCSA) to offer a cloud streaming service to its 26.5 million subscribers through a television box designed by Apple.
However, analysts at National Alliance see the potential deal as "an unmitigated positive" for the company. "As we detailed in our Arris initiation, Comcast's 'IP Home' strategy is built on a new generation of CPE [customer provided equipement] from Arris and Pace (and presumably at some point, Cisco (CSCO)) and is intended to accommodate third-party IP-enabled consumer devices such as iPhones and iPads. A new Apple device married to an Apple TV service that is managed through Comcast's network... is entirely consistent," said analyst Brian Coyne.
National Alliance has a "buy" rating for the company with a price target of $32. Analysts believe that a deal with Apple would integrate Arris technology instead of replacing it. "We see no disintermediation threat or reduction of Arris's addressable market from such a service, as we believe Apple's device would run in concert with (not in place of) Arris's CPE. If anything, a popular Apple-powered video service streaming to a subscriber-purchased Apple iDevice would only serve to grow Arris's opportunity around its next-gen IP gateways."