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Apple TV Could Eclipse TiVo and Netflix, Analyst Predicts

7:00 am on March 26, 2007 | Category: Business, Mobile Devices, Television


Apple’s new set-top-box product, Apple TV, hasn’t enjoyed quite as much hype as the iPhone, but it has the potential to seriously alter the media landscape, according to one analyst.

Jonathan Hoopes, a financial analyst with ThinkEquity Partners, predicts that between 25% and 70% of the 22 million Mac computer users, and many more PC users besides, will buy the Apple TV device over the next five years. He expects that the new wireless DVR will ultimately eclipse digital video pioneer, TiVo, and mail order DVD service, Netflix, which have 4.4 million and 8.8 million subscribers, respectively.

“As a digital media content delivery vehicle positioned in users’ living rooms, we think the AppleTV/iTunes combination could become as disruptive to legacy video purchase-and-consumption behavior as the iPod/iTunes combination has been to the traditional music business model,” Hoopes commented in a recent report, noting that the product could single-handedly add more than $10 billion to Apple’s market capitalization over the next few years.

Hoopes said that the Apple TV platform’s apparent ease-of-use would be “a major driver for rapid adoption among users who are tired of having to master ever-more-complicated configuration menus and user interfaces that are common in today’s consumer electronics.”

He also speculated that the platform could end up segueing into the gaming market, in an attempt to compete with the three big console makers: Sony, Nintendo, and Microsoft.

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    1. “segwaying” isn’t a word. Segway is the brandname of the nerdy transporter. The word is segue or sequeing (pronounced segway).

      Comment by danieleran — March 26, 2007 #

    2. Yes, you’re quite right. The word has been corrected. :)
      – Editor.

      Comment by Jeremy — March 26, 2007 #

    3. Apple TV certainly has potential to eclipse Netfilx, but not until movie prices on the iTunes Store fall considerably. For $10 you can get one movie on iTunes, but by spending the same amount with Netfilx you could rent about 4 movies in a month. That works out to $2.50 a movie from Netflix and you get superior audio and visual quality and whatever bonus features are on the DVD. Convenience is certainly a factor with Apple TV, but I’m not convinced that it’s enough to overthrow Netfilx.

      Once the iTunes Store starts selling HD content and lowers its prices or offers a rental service, then Netflix should start worrying.

      Comment by Bruce — March 27, 2007 #

    4. I wouldn’t call the appletv device a DVR. It doesn’t have a tuner and doesn’t record tv or cable shows. Alot of people don’t know this and will be shock when they can’t set it up to record their favorite shows.

      ’25 to 70 percent of 22 million mac users?’ Why such a wide range? Just wondering.

      Comment by Dan Smith — April 1, 2007 #

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    Published by TeleClick Enterprises
    Edited by Jeremy Maddock