New Apple TV with App Store game downloads predicted to drive 24M sales in 2016

Posted:
in AAPL Investors edited September 2015
A revamped Apple TV with its own App Store downloads could enter Apple into the $35-billion-per-year gaming market, adding an estimated 3.3 percent to the company's 2016 earnings per share, J.P. Morgan believes.


Apple TV's existing gaming capabilities are limited to AirPlay streams of iOS games.


Analyst Rod Hall issued a note to investors on Tuesday giving his own expectations heading into Apple's Wednesday event. In the note, a copy of which was provided to AppleInsider, Hall said he believes Apple could sell 24 million units of a revamped Apple TV in 2016, especially with new gaming support.

When adding additional potential revenue from the sale of App Store content and an anticipated streaming TV service, he sees the device having a meaningful addition to Apple's bottom line.




In his estimates, every 5 percent share Apple can carve out of the $35 billion console gaming market would add about 2 percent to his annual earnings per share forecast.

"We believe that the combination of graphics capability and an app store in the product could be disruptive for existing console players and positive for game (developers)," he wrote.




In addition to a new Apple TV, Apple's Sept. 9 event --? dubbed "Hey Siri, give us a hint" --?is widely expected to showcase the company's next-generation iPhones, known informally as the "iPhone 6s" and the "iPhone 6s Plus." While some on Wall Street are concerned that Apple may not be able to continue growing sales for its handset, Hall doesn't share those expectations.

In his view, Apple "should have little trouble" seeing iPhone sales grow year over year in 2016. His forecast calls for sales to be up 7.9 percent over the next year.

Also potentially on tap to debut this week is a so-called "iPad Pro," which is expected to be a new, larger iPad model with a 12.9-inch display. To Hall, a bigger and more powerful iPad would open Apple up to a new segment of the PC market that the company does not currently address.

Making the iPad a better laptop replacement would put Apple in a $500-to-$1,000 market space that Hall estimates could drive 100 million total units industrywide.
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Comments

  • Reply 1 of 123
    mike1mike1 Posts: 1,645member
    Likely won't affect PS4 or XBox1 sales too much, but it could kill Nintendo. Casual gaming was their niche.
  • Reply 2 of 123
    While iPad Pro might be an interesting product for specific tasks, I just don't see it as a laptop replacement. It may be a very interesting and capable graphics design product, and I can see it having many options to make it "good enough" for other uses, but it offers no specific advantage over the MacBook/Air line. Apple is not going to chase after the low end laptop market.
  • Reply 3 of 123
    Quote:

    Originally Posted by sog35 View Post

     

    Apple will dominate console gaming in 5 years.

     

    Unlike the traditional consoles who only update their hardware every 6-10 years, Apple can bring out new hardware for the AppleTV each year.  And because of economies of scale this won't even cost Apple much.

     

    Eventually the Xbox/PS will be just like PC gaming is today.  Only for the hardcore gamers.


    You are likely right. 

     

    I haven't played computer games in a long time. But I have noticed that my home entertainment options are total crap. If there is a sporting event on that I'm interested in, I might put it on. But all too often the game becomes a blowout, and that's no longer entertaining. Most "shows" are total crap, and I just can't get engaged in another formulaic portrayal of the same story over and over. Movies are a 2 hour investment, and often 20 minutes in I find myself giving up.

     

    So if there were options....

  • Reply 4 of 123
    Dear apple,
    Not only games but a full safari as well. Please.
    It's not that difficult.
  • Reply 5 of 123
    Quote:

    Originally Posted by sog35 View Post

     

     

    Touch screen interface is an advantage for many.

     

    Lets be real.  90% of the population don't need a laptop as a portable work computer.  Most just need to access email, microsoft Office, or other lightweight programs.  The big weakness for the iPad for business was lack of a full size keyboard and split screen.  The pro solves those 2 problems.  


    I dislike the touchscreen interface any time I need to type, and I don't need a split screen. But I admit I may not be representative, and YMMV. As I said, others may wish a single product that is "good enough" to do many lightweight things. An MBA is hardly a bulky device.

     

    Hard to think of MS Office as "lightweight." Your point is well taken though. Even Pages is way more than most need; and most have overlooked the very capable TextEdit.

     

    I'm not sure what 90% of the population really is or what they need. Many people have nothing but an iPhone. "Need" is surely a subjective, personal choice. Apple is likely to produce a wide range of interoperable devices that all work together anywhere anytime.

  • Reply 6 of 123
    Quote:

    Originally Posted by eightzero View Post

     

    I dislike the touchscreen interface any time I need to type, and I don't need a split screen. But I admit I may not be representative, and YMMV. As I said, others may wish a single product that is "good enough" to do many lightweight things. An MBA is hardly a bulky device.

     

    Hard to think of MS Office as "lightweight." Your point is well taken though. Even Pages is way more than most need; and most have overlooked the very capable TextEdit.

     

    I'm not sure what 90% of the population really is or what they need. Many people have nothing but an iPhone. "Need" is surely a subjective, personal choice. Apple is likely to produce a wide range of interoperable devices that all work together anywhere anytime.


    Depends on which version of MS Office you're referring to.  The versions that run on iPad or touch-version of Windows are lightweight.  The versions that run on OSX or desktop Windows are much more heavyweight in terms of features / capabilities.

  • Reply 7 of 123
    Quote:

    Originally Posted by sog35 View Post

     

     

    Dont be so sure.  Most hardcore gamers have already bought a PS4 or Xbox1 by now.  Its the casual gamers that will drive the next 50 million units of sales.  And Apple can easily steal a bunch of share from that group.

     

    You would be surprised how few hardcore gamers there are and how many casual gamers buy serious consoles like the Xbox/PS because simply there is no other viable option.  Now with the AppleTV the option is easy, convient, and cheap.


     

    I used to be into PC gaming (spending thousands on gaming rigs with multiple GPU's), but the novelty has worn off. There just aren't many "wow" titles anymore that would make me actually want to go and spend money on a new gaming rig.

     

    I bought the kids a Wii U a couple weeks ago. They love it and even though the games aren't as visually stunning as a PS4, the game play is excellent. And that's all that really matters. I can remember DOS based games that didn't even have graphics (they drew characters on the standard 80x24 screen) and they were entertaining because the game play was done well.

     

     

    The success of the Apple TV as a gaming platform will be tied to the ability of developers to create games that are fun and entertaining to play, not on developers creating eye-candy that looks pretty. And given the massive resource pool of iOS developers, and the ways they were able to bring new ideas to the iPhone and iPad it's pretty much a given they're going to repeat that with the Apple TV.

     

    I think the console gaming market seriously underestimates the talent pool of iOS developers.

  • Reply 8 of 123
    Quote:

    Originally Posted by sog35 View Post

     

    Apple will dominate console gaming in 5 years.

     

    Unlike the traditional consoles who only update their hardware every 6-10 years, Apple can bring out new hardware for the AppleTV each year.  And because of economies of scale this won't even cost Apple much.

     

    Eventually the Xbox/PS will be just like PC gaming is today.  Only for the hardcore gamers.


    I'd be surprised if a new Apple TV came out every year. I would say every 2 years.

  • Reply 9 of 123
    Quote:

    Originally Posted by EricTheHalfBee View Post

     

     

    I used to be into PC gaming (spending thousands on gaming rigs with multiple GPU's), but the novelty has worn off. There just aren't many "wow" titles anymore that would make me actually want to go and spend money on a new gaming rig.

     

    I bought the kids a Wii U a couple weeks ago. They love it and even though the games aren't as visually stunning as a PS4, the game play is excellent. And that's all that really matters. I can remember DOS based games that didn't even have graphics (they drew characters on the standard 80x24 screen) and they were entertaining because the game play was done well.

     

     

    The success of the Apple TV as a gaming platform will be tied to the ability of developers to create games that are fun and entertaining to play, not on developers creating eye-candy that looks pretty. And given the massive resource pool of iOS developers, and the ways they were able to bring new ideas to the iPhone and iPad it's pretty much a given they're going to repeat that with the Apple TV.

     

    I think the console gaming market seriously underestimates the talent pool of iOS developers.


    "The success of the Apple TV as a gaming platform will be tied to the ability of developers to create games that are fun and entertaining to play, not on developers creating eye-candy that looks pretty."

     

    Very true.

  • Reply 10 of 123
    Quote:

    Originally Posted by CanukStorm View Post

     

    I'd be surprised if a new Apple TV came out every year. I would say every 2 years.




    The nice thing about the AppleTV is that since the price is at the lower end of the spectrum (vs. games consoles), one can justify more frequent upgrades to stay abreast of any big technology jumps, which will inevitably bring things closer in line with games console capabilities.

  • Reply 11 of 123
    jungmarkjungmark Posts: 6,543member
    Here we go again. How long until the "Apple TV is a failure" reports roll in as Apple won't release numbers for it?
    Then comes the "cut back in orders" reports...
  • Reply 12 of 123
    eightzero wrote: »
    While iPad Pro might be an interesting product for specific tasks, I just don't see it as a laptop replacement. It may be a very interesting and capable graphics design product, and I can see it having many options to make it "good enough" for other uses, but it offers no specific advantage over the MacBook/Air line. Apple is not going to chase after the low end laptop market.
    Contractors, Project managers, Architects & engineers as well as artists have a great need for this & a serious "Pen" interface. Your comments show ignorance as enterprise areas where Apple has focused for decades combined w/IBM sales & Business software is huge. You can not use a laptop w/no touch screen for field work! mrphil49
  • Reply 13 of 123
    danvmdanvm Posts: 568member
    Quote:

    Originally Posted by sog35 View Post

     

    Apple will dominate console gaming in 5 years.


    I don't know how do you got to that conclusion, since nobody outside from Apple have seen it, neither know how good the gaming experience will be. 

    Quote:


     Unlike the traditional consoles who only update their hardware every 6-10 years, Apple can bring out new hardware for the AppleTV each year.  And because of economies of scale this won't even cost Apple much.

     

    Eventually the Xbox/PS will be just like PC gaming is today.  Only for the hardcore gamers.



    Having a game console for many years is a benefit for customer and developers.  I don't think having a yearly update for the ATV is for the best. 

  • Reply 14 of 123
    Gaming could mean additional revenue for Apple but it isn't going to cut into the console gaming market in any more meaningful way then iOS has in general. If you don't see that, you really don't understand the xBox 1 and PS4 gaming consumer.
  • Reply 15 of 123
    danvmdanvm Posts: 568member
    Quote:

    Originally Posted by mrphil49 View Post





    Contractors, Project managers, Architects & engineers as well as artists have a great need for this & a serious "Pen" interface. Your comments show ignorance as enterprise areas where Apple has focused for decades combined w/IBM sales & Business software is huge. You can not use a laptop w/no touch screen for field work! mrphil49



    I haven't seen Apple focused in the enterprise.  What I have seen is enterprises adopting iOS devices, and using 3rd party services to manage them, since Apple don't have an enterprise grade MDM solution for their own products.  And now they reach IBM for help.  Maybe the enterprise was the reason MS tried to push the pen / stylus, and now they have a usable one in the SP3 while Apple is going behind with the iPad Pro. 

  • Reply 16 of 123
    Lager iPad would be nice, but how about bringing back the 17" Macbook.
  • Reply 17 of 123
    Quote:
    Originally Posted by eightzero View Post



    While iPad Pro might be an interesting product for specific tasks, I just don't see it as a laptop replacement.

     

    I agree.  It will likely be co-existence, not replacement.

     

    There are certainly some work-related situations where a tablet may shine.  A few arbitrary examples:

      - Point-of-sale terminal

      - Textbook reader

      - Warehouse inventory control

      - Sheet music display (e.g., piano students, etc.)

      - etc.

     

    But there are other input-heavy situations where a traditional laptop appears -- at the moment -- to be more productive than using a tablet.  Based on this, I envision a long-term coexistence of these two form factors, each handling the use-cases that best fit its format.

  • Reply 18 of 123
    Quote:

    Originally Posted by mrphil49 View Post





    Contractors, Project managers, Architects & engineers as well as artists have a great need for this & a serious "Pen" interface. Your comments show ignorance as enterprise areas where Apple has focused for decades combined w/IBM sales & Business software is huge. You can not use a laptop w/no touch screen for field work! mrphil49

    I gave my opinion, and even specifically pointed out others may feel differently. How many millions of these kinds of enterprise users do you think Apple will sell this product to each year? 10 Million? 50 million? Please help me with my ignorance. I want to understand so I can comment intelligently.

  • Reply 19 of 123
    pmcdpmcd Posts: 393member
    sog35 wrote: »
    Touch screen interface is an advantage for many.

    Lets be real.  90% of the population don't need a laptop as a portable work computer.  Most just need to access email, microsoft Office, or other lightweight programs.  The big weakness for the iPad for business was lack of a full size keyboard and split screen.  The pro solves those 2 problems.  

    Apple has little history with devices allowing for handwriting input, unless you include the Newton. There is some rather minimal handwriting capability built into OSX but it'll great. That leaves the size and split screen capabilities as supposed advantages. You then lose the natural portrait capabilities of the 4:3 iPad line and head into a landscape oriented device which would be quite behind something like a Surface 3() which is meant for landscape use, handwriting and pre-emptive multitasking. This sounds like a recipe for disaster. Perhaps the iPad Pro will have a very limited target audience. It would be a shame if this were a move away from the 4:3 aspect ratio which serves the iPad so well.

    Split screen on such a small screen is overrated. Overlapping Windows would seem far more useful.

    In any case it's all rumour. Let them first get a proper stylus for all modern iPad.
  • Reply 20 of 123
    Quote:

    Originally Posted by Slprescott View Post

     

     

    I agree.  It will likely be co-existence, not replacement.

     

    There are certainly some work-related situations where a tablet may shine.  A few arbitrary examples:

      - Point-of-sale terminal

      - Textbook reader

      - Warehouse inventory control

      - Sheet music display (e.g., piano students, etc.)

      - etc.

     

    But there are other input-heavy situations where a traditional laptop appears -- at the moment -- to be more productive than using a tablet.  Based on this, I envision a long-term coexistence of these two form factors, each handling the use-cases that best fit its format.


    Agree. Well said. 

     

    The key seems to be personal devices. As another commenter pointed out, enterprise may indeed be a different market. iPad was designed as a consumer product, but I can see Apple expanding its line.

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