Roku, the consumer electronics company based in Saratoga, California, is ready to increase its presence in the fast-growing smart TV market, and it is doing it via its very own Roku TV. The privately held company unveiled its new product at the Consumer Electronics Show in Las Vegas on Sunday, before the annual trade show officially kicked off, and effectively made the smart TV market that much tighter. According to Recode, Roku has hinted about the possibility of expanding in the smart TV market for some time now, but the Silicon Valley company confirmed its ambitions Sunday as it announced its partnerships with Chinese manufacturers Hisense and TCL. Together, these three parties will bring the first Roku-branded TVs to the market sometime in 2014.
So, many analysts were right: Roku will have its software installed as an operating system for the new era of smart TVs. Many predicted it after the company raised $60 million in funding back in May 2013. However, the name “Roku TV” is still a misnomer, because Roku won’t be making any TVs. Rather, it will develop the software and services — which currently includes more than 1200 channels of Web video content — that will run on televisions made by other companies.
That’s where Hisense and TCL come in. These third-party manufacturers will provide the vehicle for Roku’s platform. Hisense and TCL are expected to ship their TVs in the U.S. and Canada this upcoming fall, and will offer products ranging in size from 32 to 55 inches. From these TVs, consumers will be able to access Roku-developed content, as long as they shell out the cash, and then Roku will be due to benefit. Recode explains that Roku won’t make money directly off of TV unit sales, but its software and service will still bring in the big bucks, because every time someone watches an ad-support TV show on the Roku platform, Roku will profit.
It is an intelligent scheme on the part of the Silicon Valley company minted in 2002, especially considering Hisense and TCL currently manufacture affordable TVs, so not only the cream of the top will be able afford them. However, it’s still impossible to ignore the fact that Roku faces a dark cloud of competition if tech giants Google (NASDAQ:GOOG) and Apple (NASDAQ:AAPL) ever make good on their smart TV promises. Apple’s TV box already competes with Roku’s, and according to Apple sales figures, already outsells Roku boxes, but an even bigger problem is that analysts now expect Apple to possibly release its own TV set sooner rather than later, and that could spell out considerable competition for Roku.
As Recode highlights, Google also poises potential competition because it is another major tech company which is now rumored to be nailing down the logistics of a smart TV — this time, in tandem with Chromecast. Although no official news has come out about any smart TV manufactured by the Mountain View, California-based company, it’s safe to say that it is a real possibility, and that would mean even more rivalry for Roku.
Still, as of now, Roku is the only tech company that has officially cut the ribbon on its “own” TV, so the privately held company can at least enjoy some kind of head start on its (fierce) competitors. More information on the Roku TV will be available at the CES 2014, which officially kicks off Tuesday, and there we may even learn a little more about the Apple and Google smart TV strategy.