Has Apple Conceded to Roku?
This week Apple unveiled a variety of new services in the Steve Jobs theater. If you weren’t able to catch everything they offered you can click here. Of the 4 new services Apple introduced, Apple TV+ was one of them. However, it wasn’t just the service that caught the interest of shareholders.
Without setting a date, Apple announced that there will be a new Apple TV+ app that will be compatible with both Roku, Amazon, and Samsung TV’s. Plenty of companies have made their applications compatible with Roku, but the reason this announcement has garnered so much attention is due to Apple’s long history of doing things themselves.
If you dig through Apple’s history, they have attempted to generate pretty much everything in house. Even in the 90’s when Microsoft had created BASIC, which was by far the best programming language at the time and pretty much all computer manufacturing companies were using it, Apple still tried to generate their own programming language for the Macintosh project.
For a company that has $245 billion in cash on hand, when’s the last time we saw Apple make a big acquisition? In 2014, Apple bought Beats Electronics for $3 billion, but besides that Apple is yet to acquire a company for more than $1 billion. Apple has made it pretty clear throughout their history that they intend to do business on their own, and evidently it has worked out for them.
Yet, when it comes to the Apple TV streaming service they’ve pretty much partnered with their Smart TV competitors. While contradictory to Apple’s “do it ourself” culture, this may be the right move.
At first glance it appears that Roku, Amazon, and Samsung appear to be the winners, but this isn’t going to be a winner take all scenario. Roku TV’s, as well as the Amazon Fire and Samsung TV’s have grabbed vast market share over recent years, and the compatibility for the Apple streaming app will undoubtedly add revenue growth.
There is no harm for Apple in adding accessibility for consumers to their streaming service. Over time once Apple TV+ proves to be a revenue driver for Apple and a large contributor to their services side of business, this will be looked back on as the right decision. Isolating their streaming service to Apple TV’s only, likely would’ve hindered not only total active accounts but overall revenues.
Apple did concede to their smart TV competitors but Apple chooses its battles wisely, and in the long run there’s no doubt this will help combat the declining revenue growth of their hardware sector. So who wins? This is a win-win for everyone involved, most importantly the consumer.
Disclosure: The author is not a financial adviser, and may have an interest in the companies discussed.