Apple could "run the entire pay TV market" if it manages to release compelling television hardware and software, potentially pitting the U.S. tech giant against traditional cable providers and streaming services like Netflix, an analyst has told CNBC.
The Cupertino, CA-based firm currently has Apple TV – a box that can plug into existing sets and launch apps. But Cyrus Mewawalla, head of TMT thematic research at CM Research, said Apple releasing its own TV set complete with a new operating system (OS) would make sense.
"TV today is still old fashioned. About 90 percent of it still comes from old fashioned technologies like cable, satellite and terrestrial TV. And apps like Netflix are doing so well because they have no competitor, they're just competing with other apps like Amazon and so on," Mewawalla told CNBC in a TV interview on Monday.
"But if Apple can produce what we call a pure internet TV, that is an operating system which sees what the viewer is watching, then that transforms everything. Then suddenly Netflix is competing against and entire TV built ecosystem rather than just other apps."
Mewawalla sees the new system going beyond just the streaming services available today. Instead, there will be a mixture of live TV and on-demand, making advertising a lot more targeted and potentially threatening traditional businesses.