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Cupertino company to face even more heat after Fire TV throws its hat in the ring in 2014

Just months after Google took a commanding 2-to-1 lead in tablet unit sales, new data has emerged indicating that Apple's streaming video device, the Apple TV, was passed by not one, but two of its rivals last year.
I. Google, Roku Outsell Apple Nearly 2-to-1, Each
Parks Associates, a market research firm specializing in residential service analysis, has compiled sales numbers from 2013, examining the top sellers in the streaming video device market (i.e. streaming video USB sticks, set-top boxes).  According to its estimates the sales breakdown was:
Apple can still brag that it has the global lead over its rivals.  Globally, it had sold 20 million Apple TV boxes, between when the first generation device launched in Jan. 2007 and the end of 2013.  Roku -- whose first set-top box launched in May 2008 -- had sold only 8 million units through the end of 2013.

Apple TV third generation
A third generation Apple TV set-top box

One key reason for this lead, according to Parks Assoc., is Apple’s strong international sales presence.  Apple TV is available in an incredible 121 countries, although only five (the U.S., UK, Australia, Canada, and France) have the ability to buy TV content.
Roku 3
Roku has sold 8 million units since 2008, despite only being available in four countries.

Roku, by contrast, is only available in four countries -- the U.S., UK, Ireland, and Canada.  According to Gigaom, as of June 2014 Chromecast was available in 19 countries, with the most recent addition being Brazil.
II. The "Expensive Hobby" Revisited
But despite its reach, Apple TV has struggled.
Once termed an expensive "hobby" by late Apple CEO Steven P. Jobs, the device is nonetheless the biggest miss in Apple's popular product portfolio.  In March Apple sold its 500 millionth iPhone.  In June 2014 at its annual Worldwide Developer Convention (WWDC) Apple announced it had sold 200 million iPads, since it launched in April 2010.  In other words, the iPhone, which has been on the market for a similar amount of time as the Apple TV, has outsold it 25-to-1.  The iPad in half the time on the market has outsold it roughly 10-to-1.
Key to Apple's ongoing struggles with the device are three fundamental flaws -- features, hardware updates, and price.

Apple TV

In terms of features, Apple offers modest gaming and internet radio offerings on the device.  The former is provided via AirPlay, but is limited in that Apple has yet to offer a set of APIs to produce third-party native games for the Apple TV; currently gameplay is exclusively via streaming video output from your iPhone or iPad with games on it.
Likewise, internet radio is only partially supported, requiring a complex PC-side syncing process.  In its other products simplicity has been a strong selling point; with Apple TV much of the "features" are only available via complex and at times bizarre workarounds.
III. Price and Lack of Updates Have Hurt Apple
By comparison, both Roku and Chromecast appear to have Apple TV beat feature-wise, with easy-to-use straightforward features, with standalone gaming and internet radio options.
That brings us to the second problem -- updates.  While Google deserves a bit of flak for lack of hardware updates (*cough* no 802.11ac *cough*), it has been pretty aggressive with firmware updates.  At Google I/O in June it demoed an upcoming firmware update that will allow streaming video output from many smartphones and tablets (including for games).  This should bring Google close to parity with AirPlay.

Chromecast hero

Apple, meanwhile, hasn't had a significant hardware update for the Apple TV since 2010, when it swapped out the first generation model with hard drive storage, for a more streaming-centric model with a small 8 GB NAND flash cache.  The only major hardware feature offered in a 2012 refresh was the inclusion of 1080p HDMI output.  The 2013 update brought virtually no changes.

Roku has far and away been the most aggressive in terms of hardware updates, with 19 different hardware releases since 2008, including its just-launched second-generation streaming video stick.

Price is probably the biggest sticking point, however.  The current prices of the three platforms are: The Apple TV is on the more expensive side, while not necessarily offering more compelling features.  Overall, the current pace of sales indicates that Chromecast and Roku could pass Apple TV, if they can solve their individual hurdles.

IV. Google, Roku Face Challenges of Their Own

For Roku the big challenge is expanding its international sales footprint.  

Roku LT
Roku needs to expand its international presence.

For Google, the challenge is keeping users active and invested.  Parks Assoc. released numbers indicating that Google Chromecast usage (in total hours for all users) was down.  
Google Chromecast usage

Google responded by releasing its own numbers showing that in active devices usage minutes/hours were up.

Chromecast usage
Google claims Chromecast usage is actually up. [Image Source: Gigaom]

Parks Assoc. analyst John Barrett commented in response:

The two data sets are…not contradictory because average use among active users can be increasing even while the percentage of owners using the device is declining.

Still, with fresh Chromecast apps waiting in the wings (thanks to the Q1 2014 release of a third party Cast SDK), Google could see a resurgence in usage as sales continue to be robust.

Parks Assoc. estimates that by 2015 one in four houses will have a streaming video player, such as an Apple TV, Chromecast, or Roku.  Further, it predicts that by 2017 there will be 50 million streaming video players sold a year.  Its latest data show Roku as the clear leader in usage, with Apple in second.
Roku v. Apple
Roku leads Apple TV in usage. [Image Source: Parks Assoc.]

Analyst director Barbara Kraus comments:

Multiple factors have allowed Roku to outpace Apple in U.S. sales and usage.  Roku has always had a close association with Netflix, the largest source of video downloads, and currently offers more than 1,700 channel apps as well as a choice of models with different features and price points, all of which appeal to consumers' purchasing instincts. With Amazon entering this CE category, there will be renewed pressure on all players to develop the best combination of 'can’t miss' content with a simple and intuitive interface.

She predicts Apple will release a new set-top box later this year.
V. Fire TV and the Potential for an Apple Smart TV
Looking ahead it's important not to count out Sony Corp. (TYO:6758), NETGEAR, Inc. (NTGR), and TiVo, Inc. (TIVO), all of whom are taking a piece of the streaming video pie, as well with various devices.
And then there's, Inc. (AMZN).  Already a giant in the publishing industry and tablet/eReader market, Amazon in April launched "Fire TV", a set-top box based on its Fire OS Android branch.

Amazon Fire TV

Similar in many regards to Apple TV, the set-top box retails for $99 USD.  Key selling points of the new Amazon device include voice search and slick integration of the Amazon Prime video service.  Amazon also boasts its set-top boxes has "four times the processing power" as the Roku.

Amazon Fire TV
Fire TV is powerful -- according to Amazon.

It's too early to tell if Fire TV will be a strong challenger to Roku, Google, and Apple, but thus far Amazon has been very selective in its first-party hardware releases, rarely disappointing, so the outlook seems good.  And in some ways, that could be good for Apple, as well, says Ms. Kraus.

She comments:

While approximately 50% of U.S. households have at least one Apple product, such as an iPhone or iPad, the company has not yet been able to leverage this success for its Apple TV offering.  Apple has not committed support and promotion to its Apple TV product line in the U.S., and its sales reflect this fact. But they are the global sales leader in this category, having sold approximately 20 million units worldwide as of April 2014, compared to an estimated eight million for Roku at the end of 2013. As Amazon, the world's largest online retailer, emerges as a new competitor in this space, it could awaken the sleeping giant that is Apple.

Meanwhile rumors persist that Apple will release a "Smart TV", essentially integrating Apple TV into a normal LCD TV frame.  

Apple TV Shiny

A recent press release from Parks Assoc. indicated that 34 percent of broadband homes in the U.S. have at least one Smart TV.  And Roku already has partnerships with LCD TV makers to add its set-top box technology to their Smart TVs.

Sources: Parks Assoc., Gigaom

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Apple TV is so disappointing
By tayb on 7/10/2014 7:05:55 PM , Rating: 2
I don't understand what the hell Apple is doing with Apple TV. Why isn't it running iOS? Why isn't there a gamepad of sorts? Why aren't there more apps? Why is the hardware so shitty? Why is there no onboard storage?

Basically, just what the hell is Apple trying to do with Apple TV? The tiny Chromecast is more feature rich and 1/3 the price.

I see a lot of potential but Apple doesn't seem to to have any interest at all.

RE: Apple TV is so disappointing
By Fleeb on 7/10/14, Rating: -1
RE: Apple TV is so disappointing
By w8gaming on 7/10/2014 7:34:23 PM , Rating: 3
Satirism or fan boyism i cannot tell.

RE: Apple TV is so disappointing
By Fleeb on 7/11/2014 11:24:32 AM , Rating: 2
Poe's Law. A fanatic would actually say and mean that. It's not just as eloquent as Tony Swash would say it.

RE: Apple TV is so disappointing
By mondo1234 on 7/10/2014 8:10:20 PM , Rating: 1
I don't have an Apple TV nor a ChromeCast. The Roku is an actual media player where as the ChromeCast is simply a conduit for your streaming device. I could be wrong, but it doesn't look like ChromeCast "plays" anything, nor does it have apps on the dongle. It outputs the signal from your host device to the HDMI port on your TV through your network.

I dont know about ATV, but Roku also has USB storage on the device, so you can connect external storage (thumbdrive or HD) and it will "play" the content on your tv. I dont think the Chromecast can do anything without a host device to do the heavy lifting.

I think ChromeCast would be great in a pinch, but it is nothing that I would like my kids to use, when all of a sudden, I have to take a phone call. I am not sure if my phone has enough horse power to do both at the same time...

RE: Apple TV is so disappointing
RE: Apple TV is so disappointing
By mondo1234 on 7/10/14, Rating: 0
RE: Apple TV is so disappointing
By retrospooty on 7/10/2014 9:39:06 PM , Rating: 2
The app on the smart device acts as a remote control. For example if you launch the YouTube app and start a video,and cast it to the chromecast the chromecast will then take over and download directly from the internet via wifi without the smart device being involved. So it doesn't use your smart devices battery or internet connection. That is the standard mode Chromecast shipped with. there is also the newly supported mirror mode where it'll just mirror whatever your smart device does. In that mode it would be using your smart device.

RE: Apple TV is so disappointing
By Alexvrb on 7/11/2014 7:58:02 PM , Rating: 3
I much prefer the dedicated remote. It's much more convenient especially in a large household. It also doesn't require me to switch apps if I'm busy doing something else on my device. Well worth the extra $15.

Apple TV was off the table for me, the Fire is fast but I don't really need the extra performance, so the Roku was the best all-around. Tons of channels, nice remote, low power, simple to operate (even for those who struggle with technology), and it works great. The latest Roku stick is only $49 with remote. If you prefer an external box over the stick you can get a 2720R (current Roku 2) for $60 and it's even got a headphone jack in the remote.

I will note that if you have a TV with an Xbox 360, that can come in handy for streaming Netflix et al, and Gold is no longer required for streaming. If you have a Kinect, the Kinect integration with Netflix is pretty nice. With that being said, it doesn't really warrant a recommendation and it's just a bonus for any TV with one of those attached that otherwise would lack access to streaming services.

RE: Apple TV is so disappointing
By retrospooty on 7/12/2014 9:37:24 AM , Rating: 2
"I much prefer the dedicated remote. It's much more convenient especially in a large household."

Absolutely. I don't think anyone would get Chromecast to be their primary streaming device. It's a good cheap and portable option for a 2nd TV, or to take on a trip. Also nice in those scenarios because it isn't using your devices internet to stream, so it saves your battery.

RE: Apple TV is so disappointing
By Alexvrb on 7/12/2014 9:44:54 PM , Rating: 3
I don't know. I really would rather just own a Roku stick in every situation possible. Not to say that the Chromecast is necessarily bad but... really Google just throw in a darn remote and make it $40. That would immediately make it an easier recommendation.

As for vacation... you could just take your Roku/Roku stick with you. Even the external ones are super portable and take about a minute to hook up.

RE: Apple TV is so disappointing
By Treknologist on 7/10/2014 8:23:56 PM , Rating: 2
You can use your phone to make calls even if you have something playing on the Chromecast. From an article in Digital Trends...

Here’s how casting works: Using apps on your mobile device or computer, you essentially hand off, or cast, content to the Chromecast. Using the information it receives about what you want to watch, the Chromecast finds the material on the Internet and streams it directly from the source. This way, your phone or tablet’s resources aren’t hogged up with streaming tasks, and battery life doesn’t take a huge hit. Think of your mobile device or computer as a remote control for the Chromecast.

Read more:

RE: Apple TV is so disappointing
By mondo1234 on 7/10/2014 8:52:25 PM , Rating: 2
Yes, but it does say

However, it doesn’t need to have a ton of memory because it’s not much more than a glorified gateway.

It also says:

One exception to this rule is when the Chromecast mirrors your Chrome browser on your computer. In this case, the Chromecast is depending entirely on your computer as the source for what it is displaying.

For me, I think it is a good device in a pinch, but It doesnt look like the dongle can store and decode local media by itself. So if I am streaming a movie from my tablet or cell phone, will it let me do other things while the movie plays? For a little extra money, my kids can watch the Roku uninterrupted. Personal preference, just sayin....

By Treknologist on 7/10/2014 11:38:40 PM , Rating: 2
You can do other things with your device while the movie is being streamed to the Chromecast. This has been demonstrated by Google and, as an owner of a Chromecast, I can tell you that you can keep on using your device for whatever else you need to do. I've tested it with my phone and my tablets. You can even switch between devices to control what is happening on the Chromecast.

By Reclaimer77 on 7/11/2014 8:10:29 AM , Rating: 1
Are you illiterate or something?

RE: Apple TV is so disappointing
By tonyswash on 7/10/2014 8:30:55 PM , Rating: 2
I don't understand what the hell Apple is doing with Apple TV. Why isn't it running iOS? Why isn't there a gamepad of sorts? Why aren't there more apps? Why is the hardware so shitty? Why is there no onboard storage?

I suspect it may be that Apple are waiting until they could use an A7 CPU in a new Apple TV, the new Metal API requires an A7 (I think). Once the new range of devices with an A8 are released (assuming that’s what is going to happen sometime this fall) then we may see an Apple TV upgrade. Apple is probably treading carefully so as to not replace sales of $600 devices (iPhones playing games) with sales of $100 devices (Apple TV playing games).

I have also seen some interesting speculation that a new Apple TV may play some sort of role in the new Home Kit automation system system, if so then that will be waiting until iOS 8 is released this fall.

It seems a lot of interconnected stuff might be in the pipeline for release this fall. For what it’s worth in an interview at the recent Code Conference, Apple’s Senior Vice President Eddy Cue said the firm’s forthcoming new products were the best he’d seen during his 25 year stint with the firm.

RE: Apple TV is so disappointing
By scbundy on 7/11/2014 10:15:07 AM , Rating: 3
You should know better than that, Tony. What else is he gonna say, "our current product pipeline sucks." Not to say their forthcoming lineup isn't gonna be good. But he's an executive, this is what he's gonna say every year.

RE: Apple TV is so disappointing
By hpglow on 7/10/2014 10:54:45 PM , Rating: 2
It is running ios. Just not the same phones and without 3rd party apps.

By Reclaimer77 on 7/11/2014 10:21:43 AM , Rating: 2
Why isn't there a gamepad of sorts? Why aren't there more apps? Why is the hardware so shitty? Why is there no onboard storage?

You pretty much described my reaction to everything they've ever released.

"Why does it cost X, but it's missing Y and Z?"

Here is how to fix
By peterrushkin on 7/10/2014 5:03:17 PM , Rating: 2
Probably require a refresh, but if current hardware can do great.

Upgrade to IOS 8. Give Metal a huge shot in the arm.

Get all the devs to port current games to it. Increase the current games tally in the app store to 10x currently. Add in some xbox features to it.

Bam, now you have a console for light gaming in the living room.

RE: Here is how to fix
By Mitch101 on 7/10/2014 5:26:47 PM , Rating: 2
If that doesn't work Upgrade to XBMC.

HOW-TO:Install XBMC on Apple TV 1 (Linux)

HOW-TO:Install XBMC on Apple TV 2

RE: Here is how to fix
By Reclaimer77 on 7/11/2014 12:08:10 PM , Rating: 2
See what I mean? No matter what the topic, you find a way to crowbar a Microsoft product into the discussion.

I guess I should return the favor :) Since people say I'm a fanboi anyway :P

This is what you really want:

RE: Here is how to fix
By themaster08 on 7/13/2014 1:41:20 AM , Rating: 2
XBMC isn't a Microsoft product, fool.

RE: Here is how to fix
By Alexvrb on 7/13/2014 11:25:44 AM , Rating: 2
He's trying to prove he's the bigger fanboy - succeeding, too!

Besides, that $43 for the linked Android media player would be better spent on a Roku. Another non-MS product. :P

Have all three, use two
By djdjohnson on 7/11/2014 12:30:30 PM , Rating: 3
I have all three of the devices mentioned, but only actually use two... the Roku and Apple TV.

I've been pretty satisfied with my Rokus (except for their horribly slow YouTube app), and the Apple TV is okay for what it is. The Chromecast, on the other hand, has been, well, let's use the word "disappointment."

I've had nothing but trouble with the Chromecast. If I can even get it to work, it is problematic -- the apps often crash, play the wrong video (YouTube), or play only audio with no video (Netflix). Mirroring works sometimes, but usually not. And it took more than six hours of playing with it to even get setup in the first place, no matter what combination of Internet connection, router (and even router location), and version of the Chromecast app I used to set it up. Six hours means I tried an awful lot of combinations. I eventually did get it to connect to my main WiFi network, but only when I used the iPhone setup app. The Windows app, Mac app, and Android apps all failed to work every single time -- universally the app would connect and try to setup WiFi on the Chromecast, but the device would timeout trying to connect to the WiFi network no matter which one of mine I used. I tried Cable, DSL (each on several different makes and model of router), MiFi, as well as tethering to iPhone, Android, and Windows Phone devices on three different cell phone carriers. Every single combination of those failed until I stumbled across one that finally worked -- using the iPhone app to configure with my Asus router connected to Comcast cable.

The only real beefs I have with the Apple TV are that the app/channel selection is pretty limited compared to the Roku, and that it is limited to working with Apple devices for screen sharing. It works fine.

RE: Have all three, use two
By Reclaimer77 on 7/11/2014 12:50:38 PM , Rating: 2
It's pretty clear you have a defective Chromecast unit. Why didn't you RMA it or at least use tech support? This is NOT the average experience for Chromcast owners. Didn't it occur to you that something was wrong with that??

RE: Have all three, use two
By Alexvrb on 7/13/2014 12:07:58 PM , Rating: 2
I would agree that yours is busted. With that being said, the Roku is just about perfect (and newer/higher end models perform better). The Fire TV looks really nice but I think they overshot a bit at $100. A base model that lacked voice search and was cheaper would go a long way towards battling the entry-level Roku devices and Chromecast. I might consider one if I didn't already have a streaming device or two, but it's not compelling enough to replace an existing unit.

RE: Have all three, use two
By bah12 on 7/14/2014 10:02:34 AM , Rating: 2
I went with the firetv since I'm on amazon anyway, but kinda wish I didn't. 2 big flaws, you cannot cast your screen to it unless you have a fire tablet (some 3rd party apps might work). The most glaring however is that you cannot browse/search just prime eligible content. Their own app on any other platform allows you to look in the "free" content section, but on their own device it doesn't. So I usually find something I'd like only to see it is a pay item. Pretty crappy, enough so that I may return it.

By Jim_Liquor on 7/13/2014 10:34:13 AM , Rating: 3
... no one cares. Apple TV sucks. Apple anything sucks. Anyone paying the Apple tax these days needs to stop, take a step back, and ask "GEE WHY AM I PAYING 2x AS MUCH FOR 1/2 THE PRODUCT!!???!?"

By deltaend on 7/12/2014 10:28:23 AM , Rating: 2
I'm not sure that I get the appeal of any of these devices. Basically seems to make a cheap TV a "smart" TV but just about every new TV that I've seen in the last year or so are all "smart" TV's so where can the market go with these? Additionally, every single new computer that I see has an HDMI hookup on it so why not just hook up a full fledged computer to the TV so that it can do more than simple apps? Windows 8.1 on an SSD seems like a great fit or perhaps a 1TB SSHD 2.5" drive for video storage and a wireless keyboard/mouse combo. I've been doing this for years before Apple came out with their Apple TV.

By BuddyRich on 7/13/2014 9:28:15 AM , Rating: 2
And I bought that one in 2012 so although I am a user, they aren't getting any new sales from me.

Fact is as soon as they announced 1080p support in the ATV I bought it in 2012.

I haven't used the Chromecast but requiring the phone as a remote is a non-starter with my wife for the main TV. I can see its appeal for On-the-Go entertainment and am still considering ordering one for the $40 it costs in Canadian pesos.

As for the Roku, when I compared it to the ATV in 2012 I actually liked it better but find the ATV provides a better Netflix experience and smoother menus so it wins for the wife. At least in 2012. It also had better availability in Canada with an ecosystem that had available movies and TV shows to rent in Canada via itunes. We cut the cord in 2007 so that's important to us.

Still prefer Redbox blurays for $2 as 5.99 is too expensive but sometimes the convenience is worth it.

On my projector in the theatre room downstairs I use the Win8 Netflix app and XBMC. Not perfect (no remote support, have to use a mouse) but its free.

My biggest complaint with all of these boxes is there is no way to play local (either directly attached or on the LAN) media without some sort of hassle.

Roku you can use Plex or DNLA but then need to run a server for it but it is better than the ATV.

ATV you can use itunes as server but then need to use an MP4 container and have a L4.0 25Mbps bitrate limit H264 rips so many direct bluray rips won't work without re-encoding them, and no VC-1 but those seem to be rarer as time goes on. And you have to tie it all through your itunes account with homesharing so need an interect connection and the whole thing becomes flaky.

The first box that gives me SuperHD and DD+ support in netflix, has MLB and NHL Gamecenter apps as well (bonus if has an NFL Gamepass app) and can play local media via MKVs and outputs DTS-HD and Dolby TruHD will get a buy from me, but even then XBMC on a HTPC can do more so its hard to justfy money for an inferior box.

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