Apple Confirms that Hobby Apple TV Sold Million Units

| Analysis

Apple has confirmed that it has sold one million of its new Apple TVs, a device that was first released just three months ago during a media event in September. The company announced that it expected to hit that mark last week, ahead of the Christmas holiday, and confirmed that it had with AllThingsD on Monday.

Apple has long held to the public position that Apple TV was a “hobby,” with company executives repeating this phrase at every opportunity for years. One million units in a quarter, however, represents sales of roughly US$80 million*. If the company could sustain that sales level — and there’s no guarantee that it can — that would make Apple TV worth almost a quarter of a billion dollars per year.

By most measures, that would make Apple TV less a “hobby,” and more a bonafide business, and those numbers don’t include income from streaming movie and TV rentals from iTunes, or any revenue sharing from Netflix that Apple enjoys as the real reason for Apple TV’s existence.

Apple also hasn’t been all too excited about announcing Apple TV sales in the past, in part because it was moving far fewer units with previous iterations of the device. That’s a major reason why the company has been so steadfast about the device being little more than a hobby — if it’s a hobby, there’s little pressure to disclose details of the business — and the pre-announcement of expected sales numbers last week and today’s confirmation with AllthingsD is another indicator that Apple is taking its old hobby far more seriously.

The question for tomorrow, however, is whether or not sales of the device will continue. At $99, Apple TV has clearly found a much more receptive marketplace, which is important in light of Google’s travails in trying to launch Google TV, but can it continue the momentum now that early adopters have assuaged their own Apple TV desires during the Christmas buying season?

Now that Apple TV has crossed that million units in a quarter mark, you can be sure that analysts will be asking that question and pressuring Apple to be more forthcoming on numbers for this device.

* It’s likely more than $80 million, depending on the mix of sales by third party retailers and Apple itself. We should also note that Apple is likely to attribute part of these sales to its Apple Store retail numbers, while the rest will be attributed to revenue from manufacturing.

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Comments

wab95

Not surprising on hitting the 1M target. When I went to the Apple Store last week to buy mine, the things were flying off the shelves (well, more like being rapidly snatched). The brisk sales were obvious, in that they were placed in an area alongside the iPhones and iPod touches, devices that were rapidly being sold and restocked.

The issue is, as suggested above and elsewhere, whether this is a holiday phenomenon or something that is gaining wider traction. In my case, the ATV purchase correlated with the purchase of an HDTV following seasonal price reductions, clearly a seasonal thing.

My gestalt is that, given the pick up in ATV sales post release of the current version, which preceded the holiday season, and the continued rumours and speculation about third party apps for the device, we are seeing a larger trend of consumer uptake.

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