At its annual meeting, Starbucks Corp. (NYSE: SBUX) said it would offer its own value oriented single-serve machine with Courtesy Products that would brew Starbucks and Seattle's Best ground coffee and Tazo tea.

The news followed its March 10 announcement to partner with Green Mountain Coffee Roasters (NASDAQ: GMCR) in the fast-growing single serve market. On March 10, Starbucks said it will be teaming with Green Mountain Coffee Roasters that holds a dominant share of the U.S. market at about 80 percent owing to several patents surrounding its K-cup.

The commitment to this new platform may be one reason why Starbucks offered a seemingly conservative eventual K-Cup system sales target of $1 billion.

Single serve coffee represents a meaningful opportunity for Starbucks as it is a $4 billion a year market globally with U.S. growing rapidly from its current base of about $100 million, said Larry Miller, an analyst at RBC Capital Markets in a recent note.

Morgan Stanley analyst expects single serve as a big part of Starbucks' future, and if the company aligns with Green Mountain it could see more profitability in the short term, but may be hampered in the longer term.

Coming on the heels of Starbucks' recent announcement to partner with Green Mountain (NASDAQ: GMCR), the latest deal news raises many questions and at a minimum puts the Keurig deal in a new light.

Will this machine be a closed system serving only Starbucks brands? Will it be a pod system or use filter bags similar to what you see in low tech Courtesy machines in hotel rooms? How much cheaper to the consumer, and how much more profitable to Starbucks per serving will this system be? Does this make it less likely that Starbucks will join Keurig on its next generation system (coming in 2012)?

However, UBS analyst David Palmer said We continue to believe Starbucks can deliver long-term double digit EPS growth as it executes against four growth areas, which are: 1) breakfast/snack/beverage occasions at retail, 2) premium coffee, 3) single serve brewing, and 4) international expansion (most notably in China).

Shares of Starbucks closed Thursday's regular trading session at $37.58 on the NYSE.