Roku CEO Not Threatened by Apple TV
Roku founder and CEO Anthony Wood is apparently not worried about his company’s competitors in the increasingly crowded streaming media device market. The CEO dismissed the viability of the Cupertino, California-based company’s Apple (NASDAQ:AAPL) TV product during Re/code’s introductory Code/Media event in Santa Monica on Thursday.
“Apple TV is essentially an accessory for the iPad,” Wood told Re/code’s Peter Kafka, according to CNET. “They lose money, which is unusual for Apple. If you’re losing money, why would you want to sell more?” However, the Roku chief executive also noted that his comments about the Apple TV’s margins were “speculative.”
Wood appeared to be referring to Apple CEO Tim Cook’s comments about Apple TV at the company’s recent shareholders meeting in February. Per Re/code, Cook announced that Apple made more than $1 billion in revenue from Apple TV sales and Apple TV content sales in fiscal 2013. “It’s a little more difficult to call it a hobby these days,” Cook said, per Reuters. Apple co-founder Steve Jobs famously called Apple TV a “hobby” at the AllThingsD conference in 2007, reports Engadget.
Roku makes several models of its video-streaming devices, including a Streaming Stick that is similar to Google’s (NASDAQ:GOOG) Chromecast dongle. Roku’s devices include more than 1,200 apps and work with all major video services except for Apple’s iTunes. Like Apple TV, Roku’s latest set-top box is priced at about $100. Despite the identical costs, Wood noted that Roku’s sales actually doubled when Apple lowered the price of its set-top box from $249 to $99, Re/code reports.
According to Wood, Roku’s success stems from its singular focus on the TV platform business. “Big companies want to get into [this], and they do a lot of different things,” Wood said at the Re/code conference. “But they are not as focused as us.”
According to Parks Associates’ research, Roku’s strategy has been working well for it so far. In a survey conducted in the first quarter of 2013, the market research company found that 37 percent of American households with a streaming video media device used a Roku product, while 24 percent used Apple TV.
The outspoken CEO was equally dismissive of Amazon’s (NASDAQ:AMZN) expected entry into the video-streaming device market next week. “Every year about this time, the Amazon box comes up that they’re about to launch,” Wood told Re/code’s Kafka. “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. We’re in the TV platform business. Our goal is to be the operating system for TV.”
It remains to be seen if Apple’s next iteration of the Apple TV will draw more streaming video media device users to its platform. According to sources cited by 9to5Mac and iLounge, Apple is working on a successor to the current Apple TV device that may include new types of content, including streaming-game support. Earlier this week, The Wall Street Journal reported that Apple was in talks with Comcast (NASDAQ:CMCSA) over the possibility of creating a streaming-television service that would bypass congestion caused by public Internet traffic.
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