Apple announces 20M Apple TVs sold since debut
As the tail end of Apple's quarterly conference call, Apple CEO Tim Cook threw out a somewhat surprising statistic, saying the company has sold some 20 million Apple TV units since the unit launched in 2007.
Answering a question from Piper Jaffray analyst Gene Munster regarding Amazon's recent get of HBO content for Fire TV, Cook said Apple has now sold 20 million Apple TVs.
During Apple's February shareholder meeting, Cook said he would stop calling the product a "hobby" and the ballooning sales numbers are likely part of that decision.
"The reason that I stripped off the 'hobby label' is that when you look at the sales of the Apple TV box itself and you look at content that was bought directly off the Apple TV, for 2013 that number was over a billion dollars," Cook said. "So it didn't feel right to me to call something that's over a billion a 'hobby.'"
As for the content wars currently underway between Apple, Amazon and Google, Cook said he doesn't have a personal view as far as Amazon's latest announcement of HBO Go availability. He did note that Apple TV has long had HBO shows -- since June 2013 -- while Amazon is just now receiving "older content."
Amazon released its Fire TV set-top streamer earlier in April without HBO support, a glaring deficiency for many would-be buyers.
Answering a question from Piper Jaffray analyst Gene Munster regarding Amazon's recent get of HBO content for Fire TV, Cook said Apple has now sold 20 million Apple TVs.
During Apple's February shareholder meeting, Cook said he would stop calling the product a "hobby" and the ballooning sales numbers are likely part of that decision.
"The reason that I stripped off the 'hobby label' is that when you look at the sales of the Apple TV box itself and you look at content that was bought directly off the Apple TV, for 2013 that number was over a billion dollars," Cook said. "So it didn't feel right to me to call something that's over a billion a 'hobby.'"
As for the content wars currently underway between Apple, Amazon and Google, Cook said he doesn't have a personal view as far as Amazon's latest announcement of HBO Go availability. He did note that Apple TV has long had HBO shows -- since June 2013 -- while Amazon is just now receiving "older content."
Amazon released its Fire TV set-top streamer earlier in April without HBO support, a glaring deficiency for many would-be buyers.
Comments
They could sell about 5 times more with an App Store
1) The numbers seem low for all the Apple TV models. Based on this Wikipedia page it looks closer to 30 million units if we assume the $1 billion in Apple TV revenue refers only to unit sales, and not from revenue gained from giving others a "channel" on the Apple TV home page or any rentals and purchases that may have been through the device, which we both believe is not the case.
2) I agree that an App Store would be great but I think this not easy because there needs to be better HW and unification between the TV set/monitor as well as the controller. Until both of these are reasonably ironed out I think any App Store will be as "Meh." as the current "channels" that annoyingly pop up every other week.
I bought an ATV for my 73 year-old mom. Completely tech-illiterate. She used to buy a couple DVD's every week at Costco. She has countless of viewed-once DVD's in her house. It's overwhelming. At first she was hesitant and didn't understand "renting/streaming" content from ATV without a physical DVD, but now she is hooked on renting movies on iTunes and Netflix.
So yes, perhaps 20 million units may seem low compared to Apple's other products, but people (like my mom) that wouldn't normally have any need for a PC, Apple is making a killing from her from iTunes. This is another gateway drug to get into people's homes.
ATV is an incredible device!
1) The numbers seem low for all the Apple TV models. Based on this Wikipedia page it looks closer to 30 million units if we assume the $1 billion in Apple TV revenue refers only to unit sales, and not from revenue gained from giving others a "channel" on the Apple TV home page or any rentals and purchases that may have been through the device, which we both believe is not the case.
"Reason that I stripped off hobby label, when you look at sales of the Apple TV box itself, and the content that was bought directly off Apple TV, for 2013, that number was over $1 billion." — Tim Cook, today
With regards content carriage deals in the cable industry - 20 million plus (subs) is starting to look very interesting. The tide will turn - and quality content channels/providers will be eager for the distribution channel.
The last announcement was 11 months ago:
http://appleinsider.com/articles/13/05/28/cook-apple-sold-over-6-million-apple-tvs-in-2012
6m units in 2012 and 13m total so that's 7m in the last 11 months. Not huge growth but it's growth at least. These aren't going to have a yearly upgrade cycle.
This actually lets us figure out how much they make from content per user too because $1b for 7m units means $693m hardware, $1b content / 7m = ~$143 per user per year. If 70% goes to content providers, they get $43.
A TV set with a 7 year upgrade cycle at $999 and Apple TV box upgraded every 3 years:
($999 x 2 + 7 x $43 per buyer) x 20m buyers in a year = $46b
($99 x 3 + 7 x $43) x 76m buyers per year = $46b
To make the same revenue from the box, they need to sell just under 4x as many units as a TV set. That still kinda seems like the better option at the low price point and is fairly non-commital. I could see them ramping up to 20m TVs faster than 76m boxes though at this rate.
The TV must be the next category of product they want to tackle. There's no money in wearables, certainly not $46b. 20m units per year is what Sony sells. 4K laminated panels, OLED, internet streaming, they can put the Apple TV in the plug or inline with it to allow for easy upgrades, fancy remote, overhauled UI. Maybe they want to wait until they can get Thunderbolt 3 and HDMI 2 or something.
The shoes, clothing and jewerely markets (which includes watches) is huge. Hundreds of billions per year!
The clothing and jewerely markets (which includes watches) is huge. Hundreds of billions per year!
Jewelry, health and sports monitoring devices...why they're just getting started.
I bet the said the same thing about Personal Computers, MP3 Players, Smart Phones and Tablets before Apple got into the market.
When you consider that 20 million is the worldwide number it isn't as interesting as you think it is. Still definitely impressive, but not a number that gives them much negotiating power.
And that's over 7 years.
With regards content carriage deals in the cable industry - 20 million plus (subs) is starting to look very interesting. The tide will turn - and quality content channels/providers will be eager for the distribution channel.
When you consider that 20 million is the worldwide number it isn't as interesting as you think it is. Still definitely impressive, but not a number that gives them much negotiating power.
do they sell them World Wide? I though it was a limited market due to content provider restrictions.
Though it's a list of what content can one buy or rent from the iTunes Store I don't think they'd include a country if the Apple TV wasn't available for purchase.
http://support.apple.com/kb/ht3069
Note of interest: check out South Korea
I'm only seeing 3 countries where you can buy and rent TV shows and movies, and buy music: US, UK, and Australia. Oddly, with the 1st generation Apple TV there were more countries that you could buy TV shows.
Anyway, I see your point but from the cable company's PoV the rest of the world doesn't matter, only what they think Apple can do for them in the US. The big question is will Apple want to work with a regional cable company in a particular country. I think they will just as they work with regional cellular companies in a country even though the HW usually requires no change which I'm not sure is the case with cable companies.
You're a well traveled man, so do you know what the cable co situation is in other countries? Is it like the US with multiple companies that each control a certain region, one company for the whole country, or one network accessed by competing companies?
Apple might have better luck securing content rights outside the US.