CNET is reporting that Roku CEO Anthony Wood described Apple TV as an ‘iPad accessory’ at Re/code’s Code/Media conference. Until recently, even Apple characterised the product as a ‘hobby’. The Apple TV box has not changed much since its major revamp in 2010. More controversially, Wood followed up by claiming that the Apple TV actually loses money for Apple – which would immediately seem strange since Rokus have similar hardware and cost less.
Although Wood admits that his comments are ‘speculative’, it would indeed be extremely ‘unusual’ for Apple if this was the case. Apple does not have a reputation of conducting money-losing businesses. Even the iTunes Store, which Apple originally started a ‘break-even’ enterprise, now accrues profits in the hundreds of millions every quarter.
Notably, last month Tim Cook said that Apple TV (through hardware and content sales) generated $1 billion in revenue across 2013. It seems unlikely that Cook would boast these numbers if the business was actually making losses.
Interestingly, Wood says that when Apple dropped the price of the Apple TV to $99 in 2010, Roku sales actually doubled, even though analysts predicted Roku would be pushed out of the market.
