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Roku beats Apple to the TV market

Ryan Faas | Jan. 7, 2014
If its Apple TV is ever to be more than a 'hobby,' Apple better get busy.

This ubiquitous combined access to traditional and Interent content from a single interface on a single device is actually the ideal that Google was shooting for with Google TV. But it wasn't able to fully develop the system, in part because it couldn't establish the partnerships needed for success. The challenge for any company is to develop partnerships with content owners, networks and studios and content providers. The ideal service — one that is effortless and delivers a full plate of free, subscription and purchase/rental contenton demand — by nature includes some level of unbundling, something that content owners and providers see as undermining their business models.

Allowing ala carte access to a network or studio's entire library of content poses real risks to most media companies. It is also the approach that most people picture when they see Jobs' comment about cracking the TV industry. That could indeed be as disruptive as iTunes was to the recording industry a decade ago. It's commonly assumed that the reason Apple hasn't come out with its own HDTV is because it hasn't been able to secure the partnerships needed to meet Jobs' vision, though the gradual addition of content apps on Apple TV indicates that may be changing.

How would an Apple HDTV compare to a Roku TV?
It's hard to know how an Apple-made TV would stack up to the Hisense and TCL-made Roku TVs. The one definite difference is that Apple would almost certainly take on the entire design, production and sales processes. Roku, in contrast, is largely presenting existing TV makers with a platform that they can use rather than build their own. Roku is also reported to be open licensing its platform to other manufacturers, which could give it quick dominance in the market if it can line up a range of TVs from manufacturers across the price/feature spectrum.

Apple would most likely focus on the premium segment of the market. That might not drive the greatest marketshare, but it would likely deliver better returns than the typically razor-thin margins for consumer TVs, and better profits. It's essentially the same strategy Apple employs today in in the desktop/notebook, smartphone and tablet markets.

Apple would likely keep much closer tabs on the apps or channels available to users and to the experience that they provide. It's unlikely it would provide a full SDK for the Apple TV and allow anyone and everyone to create apps for the platform.

The other competitors
Roku and Apple may dominate this market at the moment, but they are far from the only players. Google is currently on its third attempt to penetrate the market with its $35 Chromecast. Although the initial Chromecast feature set was limited, the platform has grown in recent months to include a range of apps and content providers. The biggest appeal of Chromecast is, of course, its price tag, which is significantly lower the Apple TV's $99 cost and notably lower than Roku's entry-level Roku 1, which retails for $59.99. Google's two previous efforts included the Google TV platform, which was built into some early smart TV models as well as dedicated set-top boxes and some Blu-ray players; and the Nexus Q streaming device that never made it to market.

 

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