Apple TV: The Competition-beating Hobby

| Analysis

While companies like Roku and TiVo are fighting to control the streaming content market, Apple's little hobby -- the Apple TV -- is currently the clear winner. Roku has 21.5 percent of IP streaming device market, TiVo has 6.5 percent, and Apple TV holds 56.1 percent of the market.

Apple TV outsells Roku for Internet streamingApple TV outsells Roku for Internet streaming

Those figures are based on device sales in 2012, and come from a new report from Frost & Sullivan. Those numbers show something interesting: While Ruko and TiVo have a substantial portion of the streaming media market mindshare, it's Apple that's selling more units -- more than Roku and TiVo combined.

Also interesting is that Apple TV doesn't have as much streaming content available as Roku or TiVo. What may be making Apple TV more enticing to consumers is the AirPlay feature that lets them easily stream content from their iPhone or iPad to their big screen TV without any wires or special setup.

Frost & Sullivan principal analyst Dan Rayburn stated,

Apple accounts for the majority of sales by far, despite offering relatively narrow content access – this is not (yet) a market being driven by the value proposition of a streaming TV experience. Apple TV's AirPlay feature was strategically crafted to simplify the process of transferring laptop and tablet displays to a TV screen, and it is AirPlaying – not OTT streaming – that is the primary reason for purchase of Apple TV devices.

In other words, despite the fact that Apple TV doesn't offer as much streaming content as Roku, it's still a more enticing option because it works with the iPhones and iPads people already own. Apple TV fits nicely into Apple's product ecosystem, which is no doubt by design and not by accident.

Since the set top Internet streaming device market is still taking shape, Apple has the advantage thanks to features like AirPlay, and if the company can leverage Apple TV's growth it may be able to get more networks to stream their content. If Apple can swing more content deals, it'll have a better chance at avoiding needing to fall back on "it's just a hobby" to justify lower device sales.

Apple has already brought new content to Apple TV thanks to deals with Netflix, Hulu, ESPN, Sky News, YouTube, HBO, and more. CW has also announced that it will be bringing its shows to Apple TV some time this year, and if that proves to be a success, other networks could follow suit.

The streaming content device category Apple TV falls in is still relatively small, and is easily eclipsed by devices like Xbox that also offer streaming content options. Since this market is still small, but growing quickly, there's plenty of opportunities for any of the players to jump to the head of the pack. With Apple's added features, however, Apple TV could easily keep its number one slot if it can also swing more content deals.

Apple clearly has an interest in getting its devices into our living rooms, and considering they still call Apple TV a hobby, it looks like they're doing a pretty good job.

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Comments

webjprgm

I got an AppleTV end of last year and I find that it’s most useful for using the YouTube app on my iPad and showing the video via AirPlay on the AppleTV.  I don’t like trying to use arrow keys on the Apple remote to type in YouTube search terms, but I do want to watch longer videos (Rhett & Link, anyone?) on my TV.

My excuse for buying it was Dr. Who. But they aren’t putting out new episodes at the moment.  Even watching Dr. Who is kinda AirPlay, since it’s streaming from iTunes on my computer.  I really want Apple to allow streaming iTunes content direct from the internet (and then maybe intelligently grab it from my computer if it happens to be on, like Dropbox’s use of LAN content).

I also considered my purchase to be, in part, an experiment.  It’s nice to have, but it’s features are not compelling enough that I would recommend it to very many people.

paikinho

We got ours when the ATV 3 came out. We have such an old flatscreen that I thought for some reason it was only 720p. My mistake. Current HD Video content on Netflix and from iTunes is really really a big step up from my lowly DVD’s since it is 1080P I guess.

What I enjoy most is how silky smooth the video appears. I couldn’t be more happy with the cheap little device.

Before I would run content off of my computer using and HDMI cable for video with a Toslink for audio. None of my movies were as smooth or nice to watch as the streaming content.

Additionally, airplay is really really great. What a fantastic thing to pop most everything up onto my TV screen when I want.

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