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Cable Technology Feature Article

March 04, 2014

Apple TV: With $1B in Revenue, No Longer a 'Hobby'

By Tara Seals, TMCnet Contributor

Apple (News - Alert) TV, the palm-sized over-the-top (OTT) streaming set-top, is poised for a new lease on digital life, according to CEO Tim Cook. At the annual shareholder’s meeting, he pledged that the Cupertino, Calif.-based tech giant will continue to increase research and development investment in the sector, and he noted that the company has already significantly ramped up its interest in Apple TV over the past year.

Apple TV, put simply, is “no longer a hobby,” he said, referring to Steve Jobs’ (News - Alert) famous proclamation on the product line.

He also said that Apple generated more than $1 billion in revenue from the Apple TV units last year, which would translate to shipping about 10 million of the devices in 2013. That’s more than double what it sold in 2012, meaning that Apple TV is the fastest-growing product segment in the Apple orchard.

Apple is, meanwhile, reportedly mulling some different technology reboots for the device. So far, the palm-sized gadget has been a niche device that mainly sweetens the pot for Apple’s electronic sell-through (EST) business, by offering a way for users to watch TV shows and movies purchased from iTunes on the big screen.

Apple also offers access to OTT options like Netflix, Hulu (News - Alert) Plus, HBO GO, YouTube and Vevo; and third parties have embraced it as well. Sling Media announced back in October that Apple TV owners could stream live TV content via the Slingbox app for iPhone (News - Alert) and iPad.

New functionality is coming, according to inside sources, who told the tech blog 9to5Mac that Apple is considering the integration of AirPort Express into Apple TV, including its own 802.11ac wireless router. It would be unnecessary for households that already have a Wi-Fi router attached to their ISP modem, but for those that don’t, a bundle could be an attractive one.

9to5Mac speculated that the onboard router could be used as a gatekeeper, delivering peak video performance for the Apple TV streams and “de-prioritizing other wireless traffic as necessary.”

The blog also reported that Apple has been testing a version that has a built-in TV tuner component—presumably, for receiving over-the-air (OTA) signals from local broadcast stations along with cable QAM channels. This would make it into an all-in-one cord-cutting kit of course—setting it up to take on pay-TV providers head-on.

Apple itself has not confirmed any launch event dates for 2014, but Cook indicated that more announcements would be coming soon.

Edited by Blaise McNamee

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