Why Apple shouldn’t make a streaming device for radicals


The internet – that is, people who probably spend too much time on it – likes nothing more than to speculate on what Apple might be up to. Or even better, what Apple should do. The craziest of us are sold bold to say what Apple will be do.

Today, let’s be so bold. (And maybe stupid.) There’s been a decent amount of scuttlebutt regarding the possibility of a low-cost Apple TV dongle. And on the one hand, it makes a lot of sense. Apple’s current TV-centric hardware, the aptly named Apple TV 4K (not to be confused with the Apple TV app, which we’ll get to in a moment, or the Apple TV+ streaming service, which we’ll also cover) is a nice piece of kit, as they say in the biz. It’s mastered for what it does, which means it streams shows and movies and the like very well, without any sort of lag or hesitation. It has pretty much every spec you could want. It serves as a HomeKit hub. It plays music and displays photos and lets you seamlessly mirror your iPhone, iPad or Mac to your TV. The only problem is that it’s several times more expensive than what most people buy these days, coming in at around $200.

So here is. People might be right to want Apple to have something much cheaper.

It is absolutely not necessary to manufacture such a device. And chances are that’s not the case. Because it’s still not necessary.

Phil Nickinson/Digital Trends

The truth is that Apple doesn’t need less expensive hardware connected to a TV. Not to make money, anyway. Such devices almost certainly don’t make a profit, at least not by selling the hardware itself. Google has the $50 Chromecast with Google TV. Amazon Fire TV Stick 4K (which is the Fire TV Stick we recommend for most people) is the same price. Neither company gives us much information about the number of sales or the profit margin.

Roku, however, is another story. Roku “Players” – meaning the hardware outside of Roku TVs – ranges from $30 to $100, and that’s primarily the sale price. And it’s been said in the past that the majority of what he sells is in the sub-$50 range. What does this mean for the bottom line? In other words, the hardware hasn’t turned a profit since the first quarter of 2021, when it brought in $14.8 million on $107.7 in revenue. Since then, it has posted gross profit losses of $6.7 million, $14.6 million, $45.9 million and $15.1 million over the next four quarters. (Don’t feel bad for Roku – those same four quarters saw more than $1.5 billion in gross profit on the “Platform” side, which basically means everything but hardware.)

Apple already has low-cost hardware. It’s called Roku and Fire TV and Chromecast.

So we have a pretty good idea that cheap hardware is no way to make money – and Apple is definitely in on the money.

It helps a bit if you think of the hardware in terms of a larger platform. Google makes hardware not for hardware, but so it can expand its search ecosystem even further. The same goes for Amazon, although in this case it’s e-commerce in the lead, with a secondary dose of search for good measure. Roku has always been a little different. Its simplistic operating system has (mostly) been platform-agnostic, meaning it’s been designed to run all apps across all services. He no longer cares about the money he makes on hardware and more than makes up for it in ad revenue.

Let’s take things back to Apple, then. It doesn’t rely on its nearly $200 Apple TV (hardware) to do much, really, because the Apple TV app — and the Apple TV+ streaming service — is available on just about every device. other material elements. You can watch it on Roku. You can watch it on Amazon Fire TV and Google TV and Android TV and in a web browser.

In other words, Apple already has low-cost — revenue-negative, hardware, really. It’s just that someone else gets away with it, and someone else probably takes the loss on the balance sheets. And that someone is Roku and Amazon and Google and everyone else that licenses the Apple TV app on their platform.

That won’t be entirely satisfying for those hoping for a $50 Apple TV experience. Is it possible that Apple chooses to do something? Sure. Apple certainly has money to burn. But it shouldn’t. And while it’s not a new idea, we thought about it in 2018 and came to the same result, just with different calculations.

You can get Apple TV (the app) and Apple TV+ (the service) in 4K and Dolby Vision on someone else’s $50 dongle. The overall experience isn’t as good as what you get on Apple TV (the hardware), which is why we still consider it the best streaming hardware money can buy. But it’s good enough for Ted Lassoand that’s why it’s good enough for Apple.

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