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According to estimates released earlier this year by Park Associates, 40% of US households now own a streaming media player, up from just 6% in 2010. The market has been rapidly shifting to low cost continuous sticks using dongle, with Roku (NASDAQ: ROKU) with 37% of market share in the first quarter, followed by Amazon.com (NASDAQ: AMZN), largely thanks to products such as Amazon's Roku Express and Fire TV Stick.
Seeing the success of his rivals, Apple (NASDAQ: AAPL) could enter the streaming stick game.
The current range of Apple TV starts at $ 150. Source of the image: Apple.
To move on
The Information (subscription required) announced this week that the Mac manufacturer was planning to go down with an affordable streaming stick, in order to develop its installed base before launching its next video streaming service. Previous reports suggested that the company planned to make all previously purchased original content available for free to all Apple device owners. The company would then charge the subscription fees later, after convincing the viewers to acquire any number of its original series.
It's unclear exactly what price Apple would target, but the current range of Apple TV decoders starts at around $ 150 and goes up to $ 200 for a 4K model with more storage. Roku Express, Fire TV key, and AlphabetGoogle's Chromecast starts at $ 25- $ 30. Given Apple's premium pricing model, it is unlikely that the company will reach such a low level, but it could eventually offer a product in the range of 50 to 100 dollars, more accessible to large consumers public.
The market for streaming media players is becoming increasingly commonplace, as many of the most popular streaming services (OTTs) are universally available across all platforms, among others. Netflix. If Apple hopes that its streaming service will be able to differentiate its equipment and justify higher prices, its original content will have to be extremely convincing. Given the caliber of the purchased content, including studios like A24, this is entirely possible.
Apple should definitely do it
The market has changed a lot since Steve Jobs lamented in 2010 that "nobody wants to buy a decoder". At the time, the television industry was essentially using a subsidized model in which cable service providers offered a decoder in their services. The market for streaming media players has been booming ever since, creating strong competition and a wide choice for consumers.
Currently, its cost price well above its competitors, Apple is losing its competitive edge. The company should absolutely go down with an affordable streaming stick.
John Mackey, CEO of Whole Foods Market, an affiliate of Amazon, is a board member of The Motley Fool. Suzanne Frey, a member of the Alphabet Executive, is a member of The Motley Fool's board of directors. Evan Niu, CFA holds shares in Amazon, Apple and NFLX. Motley Fool owns shares and recommends GOOG, GOOGL, Amazon, Apple and NFLX. The Motley Fool offers the following options: Long calls from $ 150 to January 2020 for Apple and short calls from $ 155 to January 2020 on Apple. Motley Fool has a disclosure policy.
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