Comcast Corporation [CMCSA] Gains After Announcing Deal with Walmart

Comcast Corporation [NASDAQ:CMCSA] , a software and cable corporation is in talks with the distribution and retail giant Wal-Mart Inc in a deal to manufacture and distribute smart TVs according to some reliable sources. Comcast aims to curve a niche in the streaming apps market in addition to its TV channels.

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In this deal, Wal-Mart will brand, market, and distribute smart TVs running Comcast software and share the revenue with Comcast from the sales. According to the People, a third party is likely to manufacture the TV sets. Comcast will just run the software in these sets. 

Comcast plans to use its software and technology it has acquired over time intending to assist users to navigate through the streaming apps as well as watch various programs with ease. This move will pit Comcast against already established streaming giants such as, the fire TV maker, Roku Inc, and Apple TV maker Apple Inc.

The terms of this deal will see a change in the U.S. cable industry where players have largely stuck for decades in their respective markets. Comcast seeks to take a different strategy where it will market to the consumers in collaboration with Wal-Mart.

Individuals with insider news about this strategy said that Comcast is planning to promote its new streaming service on all fronts in an attempt to create its niche in this market where there are already established players.

The cable giant focuses on streaming apps and smart TVs will see it move from its traditional cable TV market where it is already losing business as more and more people switch to smart TVs and streaming apps.

So far, the company has already lost about 1.2 million subscribers, most of who have moved to stream apps. It has so far gained about 1.4 million in its broadband business, indicating that consumers are moving away from cable TV.

According to research firm Parks Associates, Comcast seems to be late in the distribution of streaming apps. Roku and Amazon already have about 70% market control, with Apple following closely in third place. Alphabet Inc., is also carving a niche for itself enabling users to use remotes instead of casting streaming using their mobile phones.

Comcast, however, believes that it is still in contention owing to the time it has put in developing its technology in the industry.

For the last ten or so years, the company has been developing software for its advanced XI cable set-top box which will go beyond usual channels and enable users to toggle between the traditional channels and the streaming apps. The XI technology could be the solution Comcast will use for its software to use on smart TVs.