Apple Is Losing a Huge Market

By Mike Schuster  JAN 07, 2014 12:02 PM

The longer Apple waits to revolutionize TV, the bigger and stronger its competitors become.

 


Analysts and consumers alike consider 2013 to be a middling year for Apple (NASDAQ:AAPL), at best.
 
iOS 7 and iPad Pros were both celebrated additions to its roster, and the newly designed Mac Pro harkens back to when Cupertino could still wow us just with a sleek design. But whereas the iPhone 5S and 5C garnered ho-hum reactions from those looking for revolutionary updates to the company's smartphone line, anyone hoping 2013 would be the year that Apple finally saved TV was woefully disappointed. In fact, analyst John Siracusa slapped the company's current TV offerings with an F grade.
 
"[It's] a hard problem and a tough market," Siracusa writes. "But it's time for action."
 
As it stands, the Apple TV set-top box is the company's only official, yet lacking, solution in a burgeoning home-entertainment market. (If you're willing to shell out the cash, a Mac Mini, an external drive, and a copy of Plex or XBMC is still your best unofficial bet from Apple.) Still considered a "hobby" to Apple since the first-generation model debuted seven years ago, the set-top box falls short of delivering the "wow factor" inherent in the company's other product lines. And with the mythical Apple HDTV set still bearing the mark of vaporware, Cupertino continues to fall behind its competitors as their sets, boxes, and dongles gain traction in a growing market.
 
Case in point: This week at the Consumer Electronics Show in Las Vegas, Roku announced it will be introducing six new Roku TV sets -- ranging from 32 to 55 inches -- pre-installed with its Roku software found on its set-top boxes. The TV sets will allow users to stream Netflix (NASDAQ:NFLX), YouTube (NASDAQ:GOOG), and Hulu Plus (among 1,200 other apps) without the need for extra hardware. Although similar functionality already exists in the smart-TV market, Wired's Roberto Baldwin considers the Roku line to be "the first smart TV worth using" due to an established UI and regular software updates handled directly from Roku.
 
It's an announcement many analysts expected Apple would be making in recent years. And yet the company still hasn't debuted a fully contained set for the masses. Whether its due to a higher cost, the longer upgrade cycle for HDTVs, prolonged negotiations with media companies, or a combination of those and other issues, Apple is maintaining radio silence. All we have to go on is Steve Jobs' assertion that he had "cracked the code" to TV.
 
But years keep passing and we have yet to see that code-breaking product from Apple. And while Apple bides its time, Roku TVs, Chromecasts, and dozens of other media centers steal the spotlight, advance their features, and pull further ahead. (See: Google's Chromecast: My Favorite Gadget of 2013)
 
Apple can't afford to wait any longer. As Siracusa wrote, it's time for action.

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No positions in stocks mentioned.