Microsoft (MSFT) Negotiating with Networks About Xbox TV

Microsoft (NASDAQ:MSFT) is apparently in negotiations with networks about licensing TV content for use on the Xbox 360.

Even as negotiations are being conducted reports are internally there isn't a consensus by Microsoft executives as to implementing a TV content deal via Xbox.

The assumption is the additional costs would limit the number of units sold with the service and it wouldn't do much to sell more of the gaming consoles.

Competitive heavyweights like Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) have made similar attempts, but without having had much success so far.

The different is the Xbox, and if they give it a serious try, they could become a big player in the sector, as they have a ready-made audience of over 30 million, based on the number of Xbox 360 users, who already consume media on them.

Microsoft closed Monday at $25.08, falling 0.29, or 1.14 percent.

Apple (AAPL) May Expand AirPlay for Streaming Video

Apple Inc. (NASDAQ:AAPL) is considering an expansion of its AirPlay audio service to include streaming video from an iPhone or iPad to television sets, according to two people familiar with the project cited by Bloomberg.

Apple would license its AirPlay software to consumer-electronics makers that could use it in devices for streaming movies, TV shows and other video content, said the sources. Apple now only licenses AirPlay for streaming audio. Devices that could be used for video may be available this year.

An expanded AirPlay would allow users stream programming wirelessly from an Apple mobile device to a TV that carries the technology. That may spur wider use of Apple’s services and devices in consumers’ living rooms. Chief Executive Officer Steve Jobs has had limited success selling Apple TV, a set-top box introduced in 2007, and as recently as September still called the product a “hobby.”

Jasper Vervoort, a director of marketing at Royal Philips Electronics NV said, “Because of the market size they have with their portable devices, they have a naturally large share of the audio market. I don’t know how successful they will be with video. We would definitely have an interest in supporting it."

Apple closed Wednesday at $339.19, falling $2.01, or 0.59 percent.

No New Apple (NASDAQ:AAPL) Product Categories in 2011 Says Piper Jaffray (NYSE:PJC)

Piper Jaffray analyst Gene Munster said he believes there will be no new Apple (NASDAQ:AAPL) product categories in 2011, but the company will instead focus on improving their growing line of products.

Also noted by Munster was the probability that Apple would launch an iPhone compatible with Verizon (NYSE:VZ), saying it's almost a certainty in the March quarter. A fifth-generation iPhone should also be released sometime in the summer, Munster added.

A new iPad is also expected to be released sometime in the spring, as well as an cloud-based iTunes service in 2011.

As far as Apple TV, Munster said, "While Apple's commitment to the living room remains a 'hobby,' we continue to believe the company will enter the TV market with a full focus, as an all-in-one Apple television could move the needle when connected TVs proliferate. Moreover, in terms of markets that would be entirely new categories for Apple and could move the needle, we believe the television market makes the most sense."

An Internet, connected TV will probably be released in the next 2 to 4 years, according to Munster.

Piper maintains an "Overweight" rating on Apple, which closed Monday at $329.57, up $7.01, or 2.17 percent. They have a price target on Apple of $438.

Apple (NASDAQ:AAPL) TV Sales Reach 1 Million, Not Relevant Yet

Kaufman Brothers said the announcement by Apple (NASDAQ:AAPL) that they reached 1 million in sales for Apple TV was "Immaterial" at this time, but is considered a positive based on future contributions to the company.

Kaufman said, "While this is in line with the higher-end of expectations of 1 million units per quarter and fairly modest at a $400 million annual revenue run-rate for a company consensus is modeling $88 billion in fiscal 2011 revenue, we nonetheless view it as a positive as we firmly believe Apple TV has the potential to become a more material contributor and game changer in the TV space."

Concerning Apps and Apple TV, they added, "This capability isn't available today but we believe it could be added fairly easily as Apple TV uses a similar A4 processor architecture as the iPhone, iPad and iPod touch."

Apple was trading at $325.21, up $1.01, or 0.31 percent, as of 11:53 AM EST.

Apple (NASDAQ:AAPL) Announces 1 Million Apple TV Units Sold

Apple (NASDAQ:AAPL) announced it is on pace to sell its 1 millionth unit after launching the product in September.

Ticonderoga noted, "This morning, Apple announced expectations to reach the sale of 1 million new Apple TV units this week. Recall, Apple TV just went on sale in the U.S. in late September. Reaching 1 million units in just under three months is clearly an accomplishment, in our view, and a testament to Apple's ever-growing mind share with consumers across the company's ever-expanding portfolio. In our view, the biggest competitor to Apple TV will be Google TV; however, the overall consumer reception to Google TV has been chilly, at best. In fact, a recent New York Times article indicated that Google (Nasdaq:GOOG)(NR) has told leading consumer OEMs to cancel announcements surrounding Google TV at the January Consumer Electronics Show in Las Vegas in an effort to buy time to further refine the software.

"Longer term, we believe Apple has larger ambitions in the TV market, and the new version of Apple TV is just the beginning of something much larger. Keep in mind, the global LCD TV market is estimated at nearly $100 billion in 2010 revenue by DisplaySearch and the U.S. TV advertising market is estimated at $70 billion by Google. In our view, Apple is one of the few companies in the world that will be able to offer consumers a broad digital media ecosystem with iTunes, iBooks and the App Store."

Ticonderoga maintains a "Buy" on Apple, which closed Tuesday at $324.20, up $1.99, or 0.62 percent. They have a price target on Apple of $450.