Pavan Rajam, writing for The Rajam Report:
Apple TV is unique among Apple’s product line, in that it doesn’t compete in a zero-sum market. Sure, a lot of people use Apple TVs to stream content today, but it’s often not the only box hooked up to their TVs. Contrast this with iPhone, Watch, or Mac, where people buy and use an Apple product at the expense of their competitors.
You use your iPhone or you use a competitor’s phone. You use Mac, Windows, or something else for your main computer. Rarely does Apple ship a product that doesn’t ask for your loyalty. But Apple TV plugs into any HDMI interface and, as long as your TV has multiple HDMI ports, doesn’t ask you to make a choice. It runs just fine alongside a ChromeCast, Roku, etc.
There is clearly a viable market for streaming media players like Apple TV, Roku, and Amazon Fire TV. However, the bigger opportunity is breaking into the market for Pay TV set top boxes, which today are less compelling products but retain access to the content consumers want. The only way any tech company will be able to pull that off is by having a TV Service to accompany their hardware. Of the companies with streaming media products on the market, only one is rumored to be working on such a service.
Apple has honed and polished its market takeover strategy and now appears ready to apply the same tactics it used to transform the music universe to television and other published media. Up ’til now, Apple TV has been a dabble, an experiment, albeit one that has sold comparatively well, by some reports close to 30 million units.
Unlike its competitors, Apple is playing the long game in the TV market. Apple TV’s long term goal is not about beating Amazon, Google, or Roku in the streaming media player market, it’s about redefining the TV market by building a true smart TV platform. One that seamlessly integrates with the Apple ecosystem and converges all the different functions (gaming, long form video, home automation, and who knows what) we want from our TVs into one product. In other words: the only thing you need to hook up to your TV.
This is going to get interesting.
(BTW, be sure to visit Pavan’s original post, check out the prescient pull quote from Steve Jobs. Worth it, IMO)