Neil HughesReacting to Apple's announcement that the new Apple TV is expected to reach its one millionth sale this week, analyst Shaw Wu with Kaufman Bros. said in a note to investors on Wednesday that he views the figures as "positive, but fairly immaterial." If the device continues to sell a million units per quarter, it would amount to $400 million in annual revenue — just a drop in the bucket for a company expected to earn $88 billion in revenue in its fiscal year 2011.
However, Wu said he believes the Apple TV is now positioned to become a "more material contributor and game changer in the TV space." But he believes a major catalyst for the set-top box would be the addition of an App Store, allowing users to download new applications for the Apple TV.
Wu estimates that about 40 percent of downloads from the App Store for the iPhone and iPad are games, and he believes that games could be a major selling point for the Apple TV.
"This capability isn't available today, but we believe it could be added fairly easily as Apple TV uses a similar A4 processor architecture as the iPhone, iPad and iPod touch," Wu said.
"One question many investors have asked us is how does Apple add multi-touch capability to a TV? Our answer is the ability to connect the Magic Trackpad, similar to adding multi-touch to its desktop Macs including iMac, Mac mini and Mac Pro. We also see the potential in other peripherals including game controllers."
He also added that many users want the device to be able to record TV programs for viewing later. He said the holdup is not a "technology issue," but is being held up because of "licensing terms."
Kaufman Bros. has maintained its "buy" rating for AAPL stock, and reaffirmed its price target of $395.
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Though the Apple TV "hobby" is starting to take off, sales of the $99 set-top box just aren't enough to have a major effect on Apple's bottom line.
Reacting to Apple's announcement that the new Apple TV is expected to reach its one millionth sale this week, analyst Shaw Wu with Kaufman Bros. said in a note to investors on Wednesday that he views the figures as "positive, but fairly immaterial." If the device continues to sell a million units per quarter, it would amount to $400 million in annual revenue -- just a drop in the bucket for a company expected to earn $88 billion in revenue in its fiscal year 2011.
However, Wu said he believes the Apple TV is now positioned to become a "more material contributor and game changer in the TV space." But he believes a major catalyst for the set-top box would be the addition of an App Store, allowing users to download new applications for the Apple TV.
Wu estimates that about 40 percent of downloads from the App Store for the iPhone and iPad are games, and he believes that games could be a major selling point for the Apple TV.
"This capability isn't available today, but we believe it could be added fairly easily as Apple TV uses a similar A4 processor architecture as the iPhone, iPad and iPod touch," Wu said.
"One question many investors have asked us is how does Apple add multi-touch capability to a TV? Our answer is the ability to connect the Magic Trackpad, similar to adding multi-touch to its desktop Macs including iMac, Mac mini and Mac Pro. We also see the potential in other peripherals including game controllers."
He also added that many users want the device to be able to record TV programs for viewing later. He said the holdup is not a "technology issue," but is being held up because of "licensing terms."
Kaufman Bros. has maintained its "buy" rating for AAPL stock, and reaffirmed its price target of $395.
Due to the low cost, I went ahead and asked for one from Santa I still don't see why they don't include a blu-ray/dvd/cd player and internal storage. I suppose it's price point. But they could offer an "AppleTVPlus" or something for $299. With a blu-ray player and storage, that would be a steal, and I think doable for them at that price point. The last hurdle is DVR, but that is much tougher as Steve has said (due to the cable industry's business model).
Though the Apple TV "hobby" is starting to take off, sales of the $99 set-top box just aren't enough to have a major effect on Apple's bottom line.
It is just a hobby. The folks buying it don't really expect a finished product. Apple folks don't buy Blu-Ray players, so ATV is the best way to access Netflix, and for only $99 it works great.
The last hurdle is DVR, but that is much tougher as Steve has said (due to the cable industry's business model).
I believe you have the concept wrong from the start if you are thinking "Why is there no physical media player and how are they going to do DVR"
Well I can tell you iTunes is the reason for no physical media mate, Apple TV is 90% about selling content off the iTunes store and 10% about getting Apple's foot in the door of the living-room at a great price point.
When it comes to DVR; personally I feel it's so yesterday, I do not want to go though the bother to fast forward though commercials on a DVR for the small number of shows I would actually record.
DVR, plus the cost of the service actually works out to more money than if I were to just rent the HD shows from iTunes commercial free, Apple has done a wonderful job at making content available at pretty responsible pricing points.
Apple TV2 was the prefect gateway for me to completely cut the cable service coming into my home, obviously this will not work for everyone, however people looking for a minimal amount of content will see this is a winning choice.
Apple will increase the utility of ATV2 when they move itunes to the cloud, then they can charge us all the yearly fee for Mobileme to access itunes in the cloud.
"One question many investors have asked us is how does Apple add multi-touch capability to a TV? Our answer is the ability to connect the Magic Trackpad, similar to adding multi-touch to its desktop Macs including iMac, Mac mini and Mac Pro. We also see the potential in other peripherals including game controllers."
Kinda like the Remote app for iPhones and iPads, right?