Have you ever heard anybody making a billion dollar out of his hobby? There’s only one possible name that possesses the capability of making tons from its sideline business – the Cupertino. Apple (AAPL, Financial), which revolutionized the tablet and smartphone market, made a billion dollar in revenue from its television business.
This raises another round of speculation regarding Apple’s interest of getting more professional in the TV line than just treating it as a hobby. Apple enthusiasts might be very close to a new product launch. In the annual meeting on Friday, Tim Cook admitted to the company’s shareholders his thoughts on the TV division saying that “it’s a little more difficult to call it a hobby these days”.
Play content from your iPhone, iPad or iPod touch on your HDTV. Source: Apple
A person familiar with Apple’s development told Financial Times that the company may launch a new television peripheral, not the whole TV set. This could be rolled out before the June developer conference. What makes this more gullible is that Apple is offering heavy discount on its present Apple TV and promoting its sales by giving an additional $25 iTunes gift card. The company generally does this to clear its inventory before the release of the offerings upgraded version
A quick look at some figures
The revenue came from the $99 set top boxes of the company as well as the devises that it sold. Last year Tim Cook said that the company’s sold more than 13m units till mid 2013. The tech company never revealed its TV business revenue until last year in June when Apple disclosed that is sold as many as 350,000 movies and 800,000 TV episodes per day on its iTunes. This accounts for $3 million in revenue a day.
Apple started its TV equipment division back in 2007 and analyst since then have been very hopeful about the potential of this segment, expecting it to become a strong business line of the company. Tim Cook said that the company’s service chief Eddy Cue has bargained a lot in the recent past to add more content and bring in new channels from Sky News, PBS, NFL, and HBO.
Face off with dear peer
However, Apple needs to do much more than this to compete with the likes of peers Microsoft (MSFT, Financial) and Google (GOOG, Financial). Microsoft’s Xbox is advanced as its users can connect to the cable TV using voice controls. This makes the Redmond get an edge over the Cupertino. When considering Google, Chromecast device is pocket-friendlier and costs a third of the Apple TV.
Google Chromecast. Source: Google
Also the recent WhatsApp Messenger $19 billion acquisition by Facebook (FB, Financial), drew attention towards Apple’s iMessage app. On this Apple’s chief commented that the company is in no hurry to make big acquisition and attract headline news. It would make acquisitions that would gel with the company’s requirement to make great products. Tim touted the 23 relevant acquisitions that the company made in the past 16 months and the huge capital spending it’s made on the in-house R&D in 2013.
Looking Ahead
Apple’s iPad and iPhones have always taken away the limelight, while its TV division has been on the back burner. But with total revenue hitting a billion dollar, the company is no more going to relegate it to an addendum. A billion dollars is just a meager amount of the total revenue of the company, but decent enough to make higher consideration. I can’t wait to see Apple’s next creation in this space. What about you?
