Roku CEO speculates Apple loses money on $99 Apple TV, analyst says it's break-evenThough he offered no evidence to prove it, the CEO of Roku said this week that he believes rival set-top streamer Apple TV is a money losing product, though one analyst believes the device is more likely a break-even business for APple.
"Apple TV is essentially an accessory for the iPad. They lose money, which is unusual for Apple," Roku's Anthony Wood said at the Re/code conference, according to Cnet. "If you're losing money, why would you want to sell more?"
After Wood's comments began gaining attention, analyst Horace Dediu of Asymco was asked via Twitter whether he believes the Apple TV does in fact lose money. Dediu said he considers the Apple TV to be a "Kindle-like product" for Apple that breaks even.
The Apple TV was Apple's fastest growing hardware in 2013, with sales estimated to have grown by 80 percent, reaching around 10 million units for the calendar year. That means Apple sold about $1 billion worth of set-top boxes to end users.
The disparaging comments from Wood aren't entirely surprising, as Roku and Apple TV are in a two-horse race for leadership in the set-top streaming accessory business. Data from the NPD Group shared with AppleInsider last year revealed that the two platforms dominate with approximately 80 percent market share between them.
The Apple TV has continued to see strong sales despite the fact that Apple has not updated the hardware in two years. There have been rumors that Apple is looking to introduce a new model in the coming months, with expectations that the platform might be expanded to allow a full-fledged App Store with downloadable channels and even games.
Competition is also expected to grow even more next week, when Amazon will hold an event where the company is likely to show off its own streaming device at an event in New York City. Amazon already serves up content through its Amazon Prime subscription and Amazon Instant Video services, and it will reportedly allow for delivery of that content to users' TVs with a new streaming accessory.
Google also entered the fray last year with its $35 Chromecast, a budget-minded simple HDMI dongle that works with apps on both Apple's iOS and Google's Android.
On Topic: Apple TV
- Apple wants subscription TV service to include live local broadcasts, content rights remain roadblock
- Carl Icahn remains convinced Apple will build television set, despite report of project's demise
- Piper Jaffray abandons hope for full-fledged Apple television, remains bullish on AAPL stock
- Apple reportedly iced plans to build television set, looks to debut new Apple TV at WWDC
- Apple TV gets new channels in Australia, Europe and Japan