After enjoying a bit of a renaissance last year, growth of Apple TV sales have sagged significantly in 2014, falling to a 12-percent annual growth rate with approximately 1.9 million units sold in Q2 of this year. The news comes as part of a Strategy Analytics Connected Home Devices service report.
In the report, Strategy Analytics estimates that Apple TV’s market share in the over-the-top (OTT) streaming segment has fallen about 10 points from 38 percent in 2012 down to 27 percent in 2014. This as the set top box genre has been expanding significantly in the past two years.
David Watkins, service director for Strategy Analytics’ Connected Home Devices research and analysis service, asserts in the report that a lack of innovation has caused the aging box to fall in the rankings.
“Google and Amazon have staked their claims on the OTT Streamer segment and now the aging Apple TV is lacking features like voice control, gaming support, and most of all, an open app store. Many of those features are rumored to be a part of the next generation Apple TV, but delays are impeding its chance to succeed before Google’s Android TV and Amazon’s Fire TV grab a foothold in the market,” Watkins writes.
It might seem like Apple is in a bit of a dire situation in the set top game, but the Cupertino-based company doesn’t appear to be sweating too much. After all, even after its reported $1 billion profit haul from 2013, the device is far from a tentpole for the multi-billion dollar juggernaut. And it would appear that Apple has much bigger fish to fry when it comes to OTT services.
Back in March, news surfaced that Apple was in talks with Comcast over creating a new set-top system, designed to blend streaming services and apps, iTunes content via its cloud services, and both live and on-demand TV, all under one roof. That has lead many analysts to speculate that the next AppleTV could very well be this all-in-one solution, designed to bring a new evolution to digital media.
While Comcast is thought to be an odd choice for America’s golden brand, Apple apparently wanted to negotiate a partnership with the country’s largest Internet service to make sure that this more robust device can efficiently fast-track its content directly into living rooms everywhere. With little information to go on from the company itself, fans and experts alike are left to speculate as to whether this more advanced AppleTV is still a go, as well as exactly which obstacles are preventing Apple from getting its device off of paper and into homes.
However, a report from The Information last week shed some light on the situation. “Apple engineers who are working on aspects of the device have been told by their bosses not to expect a launch this year and are working off timelines that assume a launch next year,” the report claims. The tip came from a person familiar with the plans who spoke anonymously with the publication. Furthermore, Apple employees have allegedly cited cable companies “dragging their heels” and the pending Comcast-Time Warner Cable merger as primary causes for the continually postponed launch of the device and its related TV service.
Maybe the wait’s gotten so long that vaguely interested parties and even some Apple fanatics alike have opted for another box, or perhaps they’ve simply forgotten about the device with the passing of time. Either way, sales growth for the current Apple TV model is certainly floundering, and Apple could very well lose potential customers to disillusionment if the company doesn’t manage to get the new box out by the end of 2015.
While the new all-in-one concept is an extremely ambitious endeavor, as the media landscape changes, it would behove Apple to keep its stake in the game. If it doesn’t keep pace with the crowd, the AppleTV might just slip right back into its status as a mere “hobby.”
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