At yesterday's conference, Apple unveiled the Apple TV 4K. While the company has revolutionized the digital music market and redefined mobile phones and tablets, it has struggled in the television space. Apple's strategy of "advanced hardware supporting differentiated software" hasn't worked well in this industry. According to an article from FastCompany, the problem lies in the fact that TV is a content-driven sector where users don’t demand high-end hardware for streaming services. As a result, Apple’s higher-priced devices aren’t as appealing.
To understand Apple TV’s challenges, looking at Roku Express—a budget-friendly streaming box—offers a useful comparison. At $30, Roku Express is basic: its interface is slow, its wireless connection is outdated, and it uses bulky infrared remotes. However, even with these limitations, Roku still manages to sell millions of units. In fact, according to its recent IPO filing, Roku saw a 37% year-on-year increase in device sales during the first half of the year. In the U.S., more than two-thirds of devices sold under $50 are from Roku, with an average selling price of just $47.
Apple TV, by contrast, is priced at $150—more than three times the average cost of competing devices. Despite having better performance and polish, the user experience on Apple TV isn’t significantly different when using apps like Netflix. This may explain why Apple TV's market share is being overtaken by Amazon and Roku. Consumers aren’t willing to pay more for a similar experience.
On September 12, Apple launched the 4K HDR Apple TV, which aims to improve compatibility with competitors’ devices. However, it's unclear if this new model will help Apple regain market share. According to NPD, only 22% of Roku’s sales come from devices priced above $75. Apple’s approach of relying on premium hardware and software differentiation hasn’t worked in the streaming TV space, where content is king.
Roku isn’t the only player in the low-cost set-top box market. Amazon introduced the Fire TV Stick in 2014 for $40, and despite its lower performance compared to its $100 counterpart, it became a huge success. Parks Associates reported that within a year, Amazon’s sales tripled. Today, over 81% of U.S. broadband households with Fire TV devices use the stick version.
This trend has hurt Apple’s TV business. According to data from Parks Associates and ComScore, Apple TV ranks fourth in the U.S., behind Roku, Amazon Fire TV, and Google Chromecast. Since introducing the fourth-generation Apple TV in 2015—priced at $150, more expensive than all competitors—Apple’s market share has dropped from 32.3% to just 13.5%. Part of this decline was self-inflicted when Apple stopped selling the older, cheaper model.
Despite its shrinking market share, Apple still maintains a strong ecosystem. It offers a wide range of content through platforms like Hulu, DirecTV Now, and even social media apps like Twitter and Facebook. Its powerful developer tools and loyal user base make it an attractive platform for content providers. However, the question remains: how long can Apple sustain its position in the high-end market?
Apple has also been investing heavily in original content, pledging $1 billion for streaming TV. But with most viewers using cheaper devices, Hollywood studios have little incentive to prioritize Apple. This puts Apple in a tough spot—should it compete on price or accept a smaller market share and lose influence? The data suggests the path forward is clear, but the decision won’t be easy.
For more smart TV and streaming box news, visit Smart TV Information Network Sofa Butler (http://), China's leading platform for TV boxes and smart TVs, offering updates, reviews, and insights into smart home technology.
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