The Netflix iPhone application has just been updated to a new version which now supports "video out" on the iPhone 4 and the 4th generation iPod Touch devices. That means that Netflix subscribers can now use the app to stream the on-demand programming from their mobile handheld to their TV set using a connector cable like this one available for sale in the Apple store.

Who needs an Apple TV now?

This small but important update to the iPhone application doesn't deliver any other new features, only the video out functionality and miscellaneous bug fixes. But for many Netflix subscribers, this is going to be big news.

So, why would a Netflix user need to stream from a mobile device to the TV? Why wouldn't they just watch a DVD instead? For one thing, DVDs-by-mail takes time - the mobile option provides instant gratification.

And although Netflix streaming is supported through a number of game consoles like the Xbox, the Wii and the PlayStation 3 as well as on some connected TVs, Blu-ray players and other devices, not everyone has these devices in their home or even wants them. Mobile-to-TV streaming provides another option without another expense - besides, of course, the $50 cable or iPhone/iPod dock, if you don't already have one. That's still a lot less expensive than a brand-new Xbox.

Kill Your Cable - And Ditch Your Media Center Boxes - with Netflix

This update now positions Netflix as somewhat of a competitor to Apple's newly refreshed Apple TV platform, Google's upcoming Google TV service, media center boxes like Boxee and Roku and even some cable company DVRs like those provided to Verizon FiOS customers, for example, which already offer an assortment of popular TV shows and movies for free streaming.

With Netflix, you could cancel your cable subscription and even ditch your media center boxes or DVR and just stream movies and TV shows straight from your phone to your TV instead. Of course, you won't have access to new releases or current TV shows this way, but for many casual viewers, that's no longer a necessity.

And perhaps more importantly, this update brings your Netflix subscription with you anywhere you go - a friend's house, your parents, the hotel room, etc. All you need is a phone and a cable.

Since the update just launched today, we have not yet tested it nor reviewed its performance. If you do so, please share your experiences in the comments.