Apple’s Television Market Share Crushed by Competition

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Source: courtesy of Apple Inc.
Apple TV, the streaming media player from Apple Inc. (NASDAQ: AAPL), can’t gain any market share from its competitors. In fact, Apple TV continues to lose share.

In a report published on Wednesday by market research firm Parks Associates, Apple TV trails well behind Roku, Amazon.com Inc.’s (NASDAQ: AMZN) Fire TV and Alphabet Inc.’s (NASDAQ: GOOGL) Google Chromecast.

Year over year in the first quarter, Roku’s share rose from 33% to 37% of the market for streaming media players. Fire TV raised its share from 17% to 24% to overtake Google’s 18% first-quarter share. Apple managed to claim just 15% of the market.

Glenn Hower, senior analyst at Parks Associates, said:

One-third of U.S. broadband households own a streaming media player. The growth of the U.S. OTT [over-the-top] market provided consumers with unprecedented ease of access to video content. These streaming media devices make for quick and easy access to the top OTT libraries.

Hower also noted that higher priced devices like Apple TV, which has an entry level list price of $149, does not compete well with “low-priced and readily available” devices from Roku, which sell for as little as $30 at Walmart stores.

One has to wonder why tens of millions of smartphone buyers are willing to pay a premium price for an iPhone, but not for an OTT device like Apple TV. Partly that could be due to Apple’s first-mover advantage. No one knew that they wanted an iPhone until they saw it. And even at that it took the company three years to hit quarterly sales of 10 million units.

In the OTT business, however, Roku was the first mover, and although it sells more expensive devices, the company focused on meeting the challenge from Chromecast and Fire TV at the low end of the market. The company¬†introduced its first set-top box in mid-2008, less than a year after the iPhone debuted. The device was developed by Netflix Inc. (NASDAQ: NFLX), but the company decided to spin-off the box, afraid that makers of other streaming devices would block Netflix. Roku’s first streaming device was introduced in 2010, and the company claims 15 million monthly active U.S. users as of June 2017.