Apple is said to be interested in buying the company that makes TiVo – the digital video recorder that allows television programming to be recorded to a hard drive.
The speculation caused TiVo shares to surge – rising almost 18 per cent to close on $4.38.
Wall Street analyst Steven Kroll told Reuters: "What we hear on the street is that Apple is interested in their business and that they are a takeout target."
However, other analysts have said that Apple's focus the iPod digital music player would probably preclude it from going after money-losing TiVo, whose growth strategy has been questioned due to the rise of cheaper DVRs being deployed by cable TV providers, notes Reuters.
Jupiter Research analyst Michael Gartenberg doesn't think that the buy-out is likely. He writes in his weblog: "Apple's not a big fan of TV consumption and is not likely to want to want to get into the standalone DVR business at this point. Even if they did, I suspect Apple could build the technology themselves cheaper."
"The TiVo brand is also not Apple's style. Apple likes strong brands that aren't generic, like iPod. TiVo has come to serve as a generic term for DVR," he adds.
He also notes: "Apple isn't in the subscription business and if they were to get into that space, it would likely come to music first. I don't think there are a lot of buyers for TiVo at the moment and if there are, they probably will wait for them to lose some more money first and get them on the cheap."
According to Reuters, Time Warner, Comcast, Sony and Liberty Media are also interested in purchasing TiVo.
Failure to grow its user base has caused TiVo's stock to lose much of its value in the last 12 months. The company's stock fell from a 12-month high of $10.80 per share in March 2004 to $3.40 per share recently.
TiVo CEO Mike Ramsey claims that the company is not for sale.