With the streaming wars heating up, it’s been suggested that Apple buy Roku. That’s just plain nonsense.
Here’s the article that caught my attention. “Forget Netflix, Apple Should Be Buying Roku.”
First of all, Roku went public in late 2017. At that time, it was valued at $US2.0 billion, so Apple certainly had the means to offer the shareholders. But Apple need not. Here’s why I think so.
The Three Reasons
First, aside from the Beats affair, Apple generally doesn’t try to buy its way into a market with other company’s products. Apple has its vision and technologies that it brings to bear, usually quite successfully. A good example is how Apple completely subsumed the MP3 player market with the iPod starting in 2001. Instead, Apple buys companies with key technologies that it can effectively absorb into its infrastructure.
A second reason is that millions of Roku customers who made a mindful non-Apple choice would suddenly become Apple customers. How would Apple please them amidst an effort to bring them into the Apple family? And, of course, there would be typical conflicts in management and engineering temperaments when acquiring an outside company that had developed a competing product.
Finally, Apple TV+ has already been announced on the Roku platform. That’s where Apple will earn unencumbered services revenue that would probably rival the profits of the relatively inexpensive Roku boxes. Why absorb an alien product line that isn’t highly profitable? Even the Motley Fool article admits the financial reality.
Roku will make its margins on subscriptions and advertising but not on sales of its streaming video player lineup.
With that, I should address the primary argument in the above Motley Fool article.
There’s also the data…. Buying Roku would still provide access to the viewing habits of millions of people who watch Roku TV and ads.
Of course, companies want to track people’s viewing habits so they can sell advertising. Given Apple’s public stance on privacy, the company will likely track, for itself, which Apple TV+ shows earn the most viewers, but I surmise it isn’t going to sell our viewing preferences to third parties. So, buying Roku to capture and sell Roku viewing habits is a fool’s errand.
Apple TV 4K
Apple TV 4K is selling well. Image credit: Apple
Finally, a recent report shows that Apple TV 4K is doing quite well.” Data indicates that Apple TV grows in popularity and passes more affordable Google & Roku options.” The Apple TV is a seriously good streaming box with scaling (if needed), HLG, HDR10, Dolby Vision, and Dolby Atmos. It’s a bit more expensive but features a highly secure tvOS that benefits from the experience Apple has obtained securing iOS. Roku hasn’t always been able to claim great security. “Samsung and Roku Smart TVs Vulnerable to Hacking, Consumer Reports Finds.”
Apple would be better off working to get Apple TV+ on as many platforms as possible, reaping the services revenue, and continuing with its flagship, premium Apple TV 4K.
