Is Apple or Roku a Bigger Threat to Amazon's Fire TV?

Consumer Electronics

Published: August 20, 2014 12:30 pm

Last Updated: April 27, 2020 11:52 pm

Does a direct comparison with competitor Roku 3 on the Amazon.com Inc. (NASDAQ: AMZN) home page indicate that the company is worried about its $99 Fire TV streaming media box? Amazon has had a comparison chart that includes both Apple TV from Apple Inc. (NASDAQ: AAPL) and Chromecast from Google Inc. (NASDAQ: GOOGL), but this appears to be the first time the online retailer has called out privately held Roku.

Apple TV has generated global sales of about 20 million units and Google sold about 3.8 million Chromecast units last year, according to research firm Parks Associates. Roku, which has been selling an over-the-top (OTT) box since 2008, has sold about 8 million units, but the small company claims a U.S. market share of about 44% to Apple’s 26%.

There are no sales numbers yet for Fire TV, but Amazon is surely paying more attention to what Apple is doing, or going to do, than to what Roku is doing. After all if Apple ever gets its act together for a smart TV that includes OTT functionality, the full weight of Apple’s brand and its marketing muscle could simply smother all its competition.

But the placement of Roku in the comparison at the top of Amazon’s home page could mean that Amazon is more worried immediately about a couple of inexpensive smart TVs that are set to beginning shipping next month. Both come with Roku built into TVs made by Korean makers TCL and HiSense. The entry level 32-inch model from TCL has a list price of $229, and a 55-inch HD version from HiSense carries a list price of $649.

According to research published in March by Leichtman Research Group, some 77% of U.S. households already have at least one HDTV and about 46% have more than one.

But just 14% have a smart TV, and an even tinier total — 3% — have more than one. Smart TVs account for just 7% of all TVs in U.S. households. This is the market for the Roku-enabled TVs, and while Apple, Google and Amazon have focused on external devices to provide the OTT service, the Roku integration with inexpensive TVs could have a strong appeal to buyers who haven’t purchased either an HDTV or a set-top box or who want to buy another TV.

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