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Summary:

The Apple TV sold 1.4 million units during the holiday quarter, about half of what Apple sold in the entire year prior. While it’s far from a mass-market device, its sales numbers show that even in a relatively small market, Apple dominates the competition.

apple-tv

Hidden somewhere in Apple’s earnings call is this little snippet: According to CEO Tim Cook, the company sold 1.4 million Apple TVs during the holiday quarter. That’s notable because it’s about half of the devices that Apple had sold in the entire year prior, and one-third of the 4.2 million sold in total. In other words, sales of the second-generation Apple TVs are accelerating nicely after a (somewhat) slow start.

That’s worth noting for a few reasons:

  1. Apple is clearly outselling the competition. Apple TV might be a hobby, but it’s already the top-selling device in its class. The next-best-selling Roku streaming boxes have sold 2.5 million units over the past three years, compared to Apple’s 4.2 million units in about half the time.
  2. There’s pent-up demand for the mythical “iTV.” Apple is expected to introduce a connected TV soon — possibly later this year — and Apple TV’s sales show that users are already interested in the company’s user interface and services that would likely be available on it.
  3. Users want Internet connectivity and access to streaming content on their TVs but might not be willing to buy a new set to get it. Last week, I wrote about how the latest batch of connected TVs from manufacturers like Sony, Samsung, Vizio and others probably won’t convince consumers to upgrade in the near term, but software improvements are likely to come soon. In the meantime, Apple TV is a good stopgap for those not quite ready to jump on the connected TV bandwagon.

All that said, let’s put things into perspective: The Microsoft Xbox 360 sold nearly a million units in one week alone during the holiday quarter. The Apple TV is far from a mass-market device, but its sales numbers show that even in a relatively small market, Apple dominates the competition.

  1. “All that said, let’s put things into perspective:”

    The iPad did over a million units EVERY week last quarter. The iPhone did 2.64 million units EVERY week last quarter.

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    1. Hamranhansenhansen Wednesday, January 25, 2012

      XBox is irrelevant to the discussion. First, it’s a game console. Second, what limited overlap it has with AppleTV is only used by a small minority of users. The XBox sounds like a small jet getting ready to take off. It is not a home theater piece.

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      1. I don’t think it’s irrelevant. The Xbox is quickly becoming Microsoft’s main player for connecting the living room to online content, plus it plays video games.

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      2. Victoria Sadowski Wednesday, January 25, 2012

        Xbox is absolutely relevant. By the end of 2012, there will be over 40 major content provider’s offering their connected TV apps through the xBox Zune Marketplace. Combine this with the number of xbox 360′s in US living rooms. They are poised to dominate the market.

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      3. I agree it is irrelevant. Not only does it sound like a small jet taking off but the user interface is totally unusable as it applies to TV and trying to control my viewing experience with one of those unwieldly gaming controllers is impossible.

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      4. Totally agree. Gaming consoles do not count. Yes, it can do some of the same things, but the masses aren’t buying it BECAUSE it’s like Apple TV.

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      5. Disagree. Relevant.

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      6. Nope, Xbox is just another ‘me-too’ product in this space.
        The thing is a brilliant game machine yes, but as a video device?? Hopeless.
        Aside from the fact that it is as loud as our vacuum cleaner just trying to pick up the controller in the dark without hitting a joystick and going to the next chapter is a challenge.

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    2. I ignore the xBox sound ;) I use my xBox 360 with Kinect to access YouTube, NetFlix, soon all of my Comcast OnDemand library… Enough for me not to buy an AppleTV. So it is in this class.
      Right now Apple has a long way to go to catch up but with their other products doing awesome they could catch up in the next few years.

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  2. Mohan Narendran Tuesday, January 24, 2012

    In all likelihood, the Apple TVs are being bought (simply) for AirPlay Mirroring http://www.apple.com/ipad/features/airplay.html

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    1. And what are people mirroring? More likely than not video content — i.e. internet TV

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    2. I bought my AppleTV i) as a way to view photos in the living room, ii) as a way to play iTunes content on the family stereo. As soon as it was installed it became my Netflix and Vimeo client. I now listen to more podcasts via AppleTV than on my phone or iPod. For me, AirPlay mirroring is cool, but not the driving reason for my AppleTV.

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  3. It start to matter when I can get live sports with no blackout baloney and NO requirement to also subscribe to some cable TV package the way NBA league pass does.

    I will start to matter when I can keep streaming the series through the subscription service I pay for (Netflix) without it suddenly disappearing before we finish season 1!

    It will start to matter when media companies stop crying about piracy, weaving old timey webs of deals with middlemen, and finally sell direct to the consumer.

    That’s when it will really start to matter.

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  4. Really? Xbox is going to destroy AppleTV with cable partnerships that actually matter. You’re going to be able to use Xbox as your cable box, Netflix streamer, and media server. Game over. Jobs didn’t crack squat.

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    1. Baloney.

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  5. I’ve got both. In consistent form, AppleTV has amazing UX and video quality and XBox has a zillion other things it does, about 6 are quite awesome.
    XBox seems to use streaming protocols that Microsoft itself killed off so the schizophrenia that is Microsoft yields surprisingly crappy video quality.

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  6. Xbox is relevant (20 million + live accounts) but there is still an ever exciting wait for Apple to come with its content package deal, something it has mastered for other offerings in the past.

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  7. You all are missing the point. Neither will succeed until they are built right into the TV…

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    1. Built into the TV doesn’t make much of a difference – the upgrade cycles are too slow. Attaching a small box via one HDMI cable isn’t the same burden which attaching a device a few years ago via multiple A/V cables was, and remote integration (or smartphone control) has gotten much better.

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  8. digitalideation Wednesday, January 25, 2012

    It’s a slippery slope, but what if Apple doesn’t really want to sell a TV device – the economics of the business just are not that good… But if they march down the path of building one, they put the entire TV industry in a defensive mode when they have no way of defending, and if they appear serious enough, they could form partnerships with the TV manufacturers who don’t want them to build that TV (in the same way as they did with car manufacturers to get iPod jacks in autos) that gets their AirPlay protocols baked into future TVs. Consequently, every device which has already been sold would become an Apple TV device.

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  9. Great insights in this piece. It puts AppleTV in perspective coming out of CES. There is nothing to indicate that AppleTV couldn’t blow up on the mainstream market like the Ipod or Ipad of course but this article balances that hype with some very practical counterpoints.
    Great piece.

    Michael Girard
    Community Engagement, Radian6

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