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Apple Inc. (NASDAQ:AAPL) TV Slapped by Amazon Ahead of Launch

Amazon.com, Inc. (NASDAQ:AMZN) Jeff Bezos

Apple Inc. is one of the firms that created the lightweight streaming box market. It never turned the Apple TV into a core business, however, always apparently waiting to launch a full living room product in order to break the market completely. That move can’t come too soon. Apple has been pushed to fourth in the set-top box space by rival Amazon.com, Inc. .
The streaming box data comes from Parks Associates. It found that 86 percent of the space was held by the four big firms. Google Inc with its Chromecast, Apple with the Apple TV, Amazon with the Fire TV, and market leader Roku, which sold 34 percent of total units. Amazon’s Fire TV and Fire TV stick are the newest entrants, but they’ve already beaten Apple back.

Launching the Apple TV

The world is looking for Apple  to launch the next generation of the Apple TV on September 9, during the same event at which the iPhone 7 will appear. That’s going to be a big moment for the firm, and its chance to break into a market that it’s increasingly being left behind in.

The Park Associates report found that just 17 percent of households that had a streaming device were using the Apple TV. That’s a solid base for the firm to work off of, but if Apple doesn’t offer users anything new, they are more likely to go for alternatives like those offered by Amazon.

Barbara Kraus, who wrote the report, said that “Device shipments and sales receipts are important performance measures, but an equally critical metric for device makers is ongoing usage. Usage will drive alternate revenue streams such as content sales and advertising.”

That’s very important for Apple going into the launch of its next Apple TV. The firm wants it to be more than just a cheap bit of hardware, it wants to be able to sell its own TV service through the platform.

Apple TV will sell more stuff

The streaming box market is a competitive one and  Apple  will have a hard time charging much more than $99 for one. That’s the price that many of the other players in the market charge for features that line up closely.

Nobody is quite sure what form the Apple TV and service are going to take. Tim Cook might want to put the device at the center of the firm’s product line-up. That would explain the removal of the iPod from display cases this week.

Wall Street, despite putting huge pressure on Apple in recent weeks, is still looking to see an Apple TV that will add a new leg of growth to the firm’s business. Falling behind Amazon.com  and Jeff Bezos in a hardware market is not only a little embarrassing, it’s a lost opportunity.

Daniel Ives of FBR Capital said, in a recent report, that the Apple TV service could be worth up to $3B in sales by 2018.

“Streaming TV would provide another future growth avenue into the next-generation consumer. It represents the next frontier for Cook & Co,” he wrote.

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.

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