Apple's TV Service Could Be 'Groundbreaking' With Siri And PrimeSense Technology

Apple Inc. AAPL is once again rumored to be working on an online TV service that will work exclusively with iOS devices.

Analysts have anticipated the service for months, but the hype was reignited when Apple TV's price was reduced to $69. Now The Wall Street Journal has reported that Apple hopes to launch its service this fall.

Asif Khan, CFO of Virtue LLC and CEO of Shacknews.com, told Benzinga that he "very strongly" believes Apple will enter the pay-TV industry. He said that the company is building new data centers for something important -- not merely iTunes.

"If you look at Apple, part of [what's] missing is the living room," said Khan. "For them to empower all of their devices -- to have a TV service on them -- is something they could do. Accompanied with a new box, I think it could be groundbreaking."

Some industry watchers are taking notice just because Apple is the company involved.

"You have to really treat it seriously," Marc Berman, editor in chief of TV Media Insights, told Benzinga. "Apple is no small potato -- it is a leading brand. It makes perfect sense that Apple would want to dive into the business."

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Khan noted that Apple acquired PrimeSense, the company that provided Microsoft Corporation MSFT with sensors for Kinect, the company's first motion-controlled gaming device. Thus far, Apple has not released any product connected to that acquisition. Khan thinks that will change when the next Apple TV set-top box arrives.

"I think they have a breakthrough with how you're going to interact [with TV]," said Khan. "They have [Disney CEO] Bob Iger on the board of Apple now. I think they have a vision for how we're going to consume content."

Khan also expects the next Apple TV to feature some form of Siri integration. He said that he tends to believe the words of Apple co-founder Steve Jobs, including his claim to have "cracked the code" for TV.

"When you look at the history of that company, they leave stuff on the shelf for a very long time until they're polished and ready to show," Khan added. "I'm excited for it. The watch is not the next billion-dollar market for them, but television could easily be. If I were Netflix, I'd be very concerned."

At What Cost?

Whether investors are taking this seriously or not, Berman still wonders: what benefits will you get from this service?

"What are you going to get out of it that will benefit you in the long run?" he questioned. "Are you gonna have everything you need if you acquire such a service? Is this just a company that's going to be distributing various products?"

Berman is also concerned about the abundance of pay-TV options and online-only alternatives.

"It falls back to the same situation," he said. "There is so much of this now, it's going to start getting confusing in terms of what you should acquire, what you need and what you don't need."

Finally, Berman addressed the challenge of launching a TV service without all of the major players on board. Apple might be forced to move ahead without NBCUniversal if it does not patch up its relationship with Comcast Corporation CMCSA.

"NBCUniversal has a lot of cable networks," said Berman. "That's a big piece of the equation. If NBCUniversal is not a part of it, you have to say to yourself, am I going to want to watch anything on Oxygen, USA, SyFy? Can Apple do it without NBCUniversal? Potentially, yes, they could. Is it better if they have NBCUniversal? Yes. It's a lot of networks. It's big."

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.