Sales of Apple TV Continue to Be Slow - Apple

Shipments of Second-Gen Apple TV Near One Million

by Anton Shilov
12/21/2010 | 06:07 PM

Sales of Apple TV set-top-box (STB) continue to be low as the company will merely manage to sell one million of its second-generation devices this year. Despite of obvious failure, some analysts still expect the STB to be a part of larger strategy that may hint on Apple's intention to enter the market of TV-sets.


On Tuesday Apple announced that that it expects sales of its second-generation Apple TV to top one million units later this week. The device, which allows to watch videos from the Internet on any television, was released in early January, 2010, at the price of $99 per unit. But despite of three times lower price compared to the original Apple TV as well as greatly increased interest towards Internet videos, sales of the novelty in its first year will be similar.

The reasons for low popularity of Apple TV STB are pretty obvious: traditional limitations imposed by Apple onto all of its products combined with maximum resolution of 1280x720 (720p) with 4Mb/s maximum bitrate, the quality level that is dramatically lower compared to Blu-ray disc and some online video rental services. By contrast, competing products not only allow to playback various types of content, but also allow to watch full-HD movies.

Despite of obvious drawbacks in Apple TV technology, Apple's rather strange approach to the living room and the fact that modern Blu-ray disc players as well as a number of competing STBs can provide similar services as Apple TV either better or for free, some analysts believe that Apple may eventually release its own TV-sets with built-in Apple TV.

"Apple is one of the few companies in the world that will be able to offer consumers a broad digital media ecosystem with iTunes, iBooks and the App Store. Additionally, Apple arguably offers the most aesthetically pleasing consumer electronic products in the world. The TV is at the center of living rooms around the globe, and an Apple TV would likely be a big hit, in our view. [E]xisting LED LCD TV makers will be hard pressed to compete with Apple [...] due to the ecosystem Apple has been developing [...] Apple can also leverage its app library into the TV market, as we believe apps will ultimately proliferate the TV world," said Brian White, an analyst with Ticonderoga Securities, reports Barron's.

Maybe Apple TV will eventually get more popular than it has been for the past four years. The only question is why it still has not?