“Reacting to Apple’s announcement that the new Apple TV is expected to reach its one millionth sale this week, analyst Shaw Wu with Kaufman Bros. said in a note to investors on Wednesday that he views the figures as ‘positive, but fairly immaterial,'” Hughes reports. “If the device continues to sell a million units per quarter, it would amount to $400 million in annual revenue — just a drop in the bucket for a company expected to earn $88 billion in revenue in its fiscal year 2011.”
Hughes reports, “However, Wu said he believes the Apple TV is now positioned to become a ‘more material contributor and game changer in the TV space.’ But he believes a major catalyst for the set-top box would be the addition of an App Store, allowing users to download new applications for the Apple TV.”
Read more in the full article here.
The Apple TV interface is simple and clean, the playable media is clearly defined as anything that will play in iTunes, and the vast iTunes ecosystem is well… vast. Those are challenges competitors must face.
In my experience, I’ve found DNLA to be unreliable.
“Analyst” seem a bit of a strech. I call folks like him non-ficton creative writers who infuse their essays with a bit of fantacy.
What is billion here and and half a billion there among the friends :S
Some companies would be so happy with half a billion revenue per quarter from some hobby.
funny how perspective makes people dumb.
100 million is not insignificant just because they are expected to make $88b.
That’s 1 million people hooked into the apple eco-system which brings a lot of other profits.
maybe we’ll be able to rent all TV shows soon.
trojan hobby horse
So, when the AppleTV gets an app store and programers start turning the iPod touch, iPhone and iPads into multi player control pads for their games, how many AppleTV and apps will be sold? Still a hobby? This has already been demoed and works very well.
Steve Ballmer, how well do you think those Xbox players will be selling? What do they cost? How much a game?
Steve, it sucks to be you.
Off course it will not have to much of an impact as far as Apple’s bottom line, but that is not what is newsworthy. What is important is that Apple it self felt that It had to make this figure public and the only reason I can see of making such a move is to allow potential developers know that it is selling well. Applications are coming to the Apple TV, it’s just a matter of Apple pulling the trigger.
When it comes to profit they are underestimating a bit, they seem to forget te amount of money coming from rentals, seriously doubt that I am the only person renting from iTunes on my apple tv. Seriously doubt that majority only use it for netflix or streaming. However it is still just spare change to Apple. However it has set them up for changes to come. I remember when everyone was say this about the iPhone. Now look what it has become. It may just be a hobby right now, but when the time is right and Steve has firgued out how to bring about a revolution, it will no longer be a hobby. The apple tv is a great idea, it was a bit too early, luckily it has stood through and will come out a winner.
It’s amazing that some of these “analysts” have jobs still after they continuously miss the mark. It’s the content stupid. Apple TV is just a portal to allow you to stream content from iTunes to your TV. Plain and simple, nothing more. Why do you think it’s so cheap? It’s not the hardware they are trying to make money off of… The only numbers that are important are how many devices that are out there, and the other thing is how many people (1 million) bought the Apple TV knowing AND expecting to purchase content.
Guys … give him a break. He didn’t say the Apple TV is immaterial, he said its modest sales are immaterial to Apple’s bottom line. “… sales of the $99 set-top box just aren’t enough to have a major effect on Apple’s bottom line …”. No dissing of the product or the company, just a statement of fact. He could have said the same about any of several other products in the same vein. When you have half a dozen major product lines with double-digit percentages of your bottom line, your lesser products – valuable as they may be – won’t make a big dent in your bottom line. That doesn’t mean we don’t value them or that they are somehow unworthy.
Is everyone forgetting the new TV DOES NOT have onboard storage for apps.. The minimal RAM that it does have is for the OS and buffering..
First killer app for apple tv – cross hair overlay on any tv programme, target actor, tap to shoot, freeze frame, explode their head.
That’s my idea, and I patented it.
@mikek so the game couldn’t be on your iPhone and it’s tv specific functionality get streamed?
No?
So we now have three iPhones with cross hairs overlayed on Jeremy Kyle.
Genius.
I’ll buy half of that
@diskgrinder
anythings possible, although i’m skeptical of that.. not to mention completely different resolution/aspect ratio.
The app store already exited for more than a year.. If Apple planned apps for tv, then why would they have not been released as a feature at launch?
I’d like to see apps on tv, but with a brand new hardware revision and no onboard storage, i’m doubtful.. I hope i’m wrong..
@DLMeyer
This is exactly what I’m talking about… He misses the point, as do you, that it will have a huge impact on Apple’s bottom line through iTunes. Apple gives a shit how much money it makes off the hardware, they want to sell content through iTunes. So 1 million people out there now have a device that they will be purchasing content through off iTunes, and they knew that when they bought it. Through movie and TV show rentals, the Apple TV could easily add 1 billion in revenue for Apple just through subscriptions. That’s what this yahoo is not getting, he is just looking at revenue from selling the hardware, which is NOT the point!
Remember the teardown of the Apple TV shows it has 8 gigs of storage. Apple loses money on each sale today. There will be apps.
1 million Apple TVs at $99 each (100 m total) is immaterial.
ok
what is 1.5 m Windows 7 Phones announced by Msft this week sold at avg. $15 a license (calculating from Win Mo licenses from the past — 22.5m total) for Microsoft?
I think the ‘hobby’ just kicked the ‘major platform’. lol.
1 million means that 1 million more have access to Netflix and Apples’s online offering than perhaps had before. Overall, this is great news for content providers!
What Wu appears to be saying is that because Apple makes a ton of money on other things, the overall impact of Apple TV on it’s bottom line is minimal. However, what he fails to mention is that Apple doesn’t only derive income from selling it, Apple also gets income from content and software to run on it.
Again, that income may currently be trifling in the great scheme of things, but it’s a good foundation for future growth and future growth underpins everything that Apple does.
I think he’s actually saying that 1 million current sales is not a big deal considering Apple’s current income but it does set the stage for BIG things to happen when Apple opens up an AppleTV store. Especially because none of Apple’s competitors are selling anywhere close to that many units, except for maybe the Roku device.
I think that by this time next year, the AppleTV will be officially a BIG deal.
At the very least, AppleTV chokes off any dopey ideas from MS or Google from gaining any kind of foothold in the living roomand makes sure that iDevice users have access to a decent selection of content.
I still believe that was the original reason Apple created the iTunes store. MS (and the RIAA)was all set to unleash their proprietary codecs and draconian DRM on digital media and Apple realized that would eventually suck for iPod users and Apple and the universe in general. iTMS made sure that didn’t happen and turned out to be a lot more. MS has been totally sidelined in digital media since then.
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Hughes reports, “However, Wu said he believes the Apple TV is now positioned to become a ‘more material contributor and game changer in the TV space.’ But he believes a major catalyst for the set-top box would be the addition of an App Store, allowing users to download new applications for the Apple TV.”
I totally agree with this statement. Apple is in a position now create a “App Store” for the Apple TV. I believe that they were just waiting to see how the ATV will sell. They done this before. They done this with the iPhone. And as everyone knows that history repeats itself. The key is Airplay. There is some room on the ATV for Apps. It has 8 Gigs. Some apps like for steaming from Hulu could reside on the ATV. Then there could be other apps like games that could some how be Air-played through the ATV. The play action that you usually see on a iPod touch iPhone, or iPad screen can be streamed through the ATV on your HDTV and then the iOS device can become some sort of controller. This can be a game changer to the video game market.