CNET is reporting that Roku CEO Anthony Wood described Apple TV as an ‘iPad accessory’ at Re/code’s Code/Media conference. Until recently, even Apple characterised the product as a ‘hobby’. The Apple TV box has not changed much since its major revamp in 2010. More controversially, Wood followed up by claiming that the Apple TV actually loses money for Apple – which would immediately seem strange since Rokus have similar hardware and cost less.
“Apple TV is essentially an accessory for the iPad. They lose money, which is unusual for Apple,” he said Thursday, speaking at the Recode conference here. “If you’re losing money, why would you want to sell more?”
Although Wood admits that his comments are ‘speculative’, it would indeed be extremely ‘unusual’ for Apple if this was the case. Apple does not have a reputation of conducting money-losing businesses. Even the iTunes Store, which Apple originally started a ‘break-even’ enterprise, now accrues profits in the hundreds of millions every quarter.
Notably, last month Tim Cook said that Apple TV (through hardware and content sales) generated $1 billion in revenue across 2013. It seems unlikely that Cook would boast these numbers if the business was actually making losses.
In addition, Roku’s CEO also seemed unfazed by the upcoming (albeit rumored) competition in the set-top box space by both Apple and Amazon. In Re/code’s own reporting of its interview, Wood is quoted as saying that they have been fighting Apple for six years with sustained success.
“Every year about this time, the Amazon box comes up that they’re about to launch. And the new Apple TV is about to launch … We’ve been competing with Apple TV for six years now, and every year, we’ve grown,” Wood told Kafka. ”We’re in the TV platform business. Our goal is to be the operating system for TV.”
Interestingly, Wood says that when Apple dropped the price of the Apple TV to $99 in 2010, Roku sales actually doubled, even though analysts predicted Roku would be pushed out of the market.
Just a few years ago, industry analysts predicted the end of Roku with the introduction of the Apple TV. But Wood told the Code/Media audience that when Apple dropped the price of its Web TV set-top to $99 from $249, Roku sales doubled.
Whether Roku can continue in the industry as competition heats up from the larger players is yet to be determined. Amazon will announce its streaming TV box at an event next week. 9to5Mac has previously reported that Apple is preparing a revamped Apple TV, with significant changes to both software and hardware. Apple’s renewed focus on the product also lines up with Cook’s recent remark: ‘It’s a little hard to call it a hobby anymore.’.
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