5 Reasons Why a New Apple TV Will Launch This Fall (AAPL)

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Apple (AAPL) suffered a setback in its plans for living room domination when the streaming TV service it has been planning was delayed until 2016.

Apple TV, expect a new Apple TV this fall
Source: Apple

Apple has been losing ground in the streaming race to competitors like Sony (SNE), and if Apple plans to play catch up, it’s going to need the proper hardware to do so.

So despite this bump in the road, Apple will launch a new Apple TV set-top streaming box this fall. Here are five reasons why we’re likely getting a new Apple TV on Sept. 9.

Reason #5: Current Apple TV Hardware Is Ancient

Apple released the Apple TV in 2007, upgrading it to the familiar black puck form factor in 2010 and switching to a version of iOS –the same software that powers the iPhone and iPad.

The $99 third generation Apple TV released in March 2012 brought 1080p HD support and was powered by the A5 CPU used in the iPhone 4s and iPad 2. It received a minor spec bump in January 2013, but was basically unchanged from the 2012 version and visually identical to the 2010 Apple TV.

In other words, fickle consumers may’ve assumed the Apple TV hasn’t changed in appearance in five years. For all intents and purposes, its hardware is over three years old. Both are a lifetime in the rapidly changing world of consumer electronics.

Reason #4: AAPL’s Streaming Market Share Is Slipping Fast

Apple’s primary competition in the set-top streaming market was Roku, and in 2012 — when that 3rd generation Apple TV was released — AAPL TV held a commanding 56% of video streamers sold, with Roku capturing nearly 22%. The company sold more than $1 billion worth of Apple TV boxes in 2013, as the set-top box officially became big business.

Then all hell broke loose.

Google (GOOGGOOGL) released the $35 Chromecast in 2013. In 2014 Amazon (AMZN) released the $99 Fire TV, a streamer that added video gaming and voice control to the mix and later that year brought out the Fire TV Stick, a $39 video streamer. In fall 2014, Google introduced the Nexus Player, a set-top box that streams video and plays Android games.

Roku also continued to release new hardware.

Apple slashed the Apple TV price to $69 in an attempt to retain market share, but the ancient Apple TV hardware was hardly competitive.

Parks Associates released a report showing that in 2014, Apple TV had dropped to fourth place at 17% of streaming devices sold in the U.S., behind Roku, Google and Amazon.

Reason #3: The Video Streaming Market Has Significant Growth Potential

That same Parks Associates report points out that streaming media device ownership in U.S. households with a broadband connection is in the range of 20%.

In other words, the market for these devices is far from saturated. Apple is unlikely to ignore the opportunity, especially when it also has a good shot at convincing those among the 20% who already own an Apple TV to upgrade to a next-generation device.

Reason #2: The New Apple Subscription TV Service Will Fall Flat Without an Apple TV Base

We’re pretty sure Apple will tie its upcoming subscription TV service to the Apple TV. It’s possible it could be made available to iPhone and iPad owners, but the point of it is to provide a streaming alternative to cable. Without a new Apple TV, AAPL is going to have a hard time winning the number of paying subscribers to make that subscription TV service look like a success.

Reason #1: The Holiday Shopping Season Is Critical

Amazon trumpeted the success of its streamers over the 2014 holiday shopping season, pointing out that the Fire TV was the top-selling streamer on Amazon.com, the Fire TV Stick was among the top items shoppers flagged on their wish lists and that the Fire TV Stick was the fastest selling Amazon device ever.

Expect streamers to be hot with gift givers this year as well. A $99 (or less) device that plays games on top of movies, and runs 99-cent apps instead of $60 console titles will be especially popular with budget-conscious parents.

Apple just confirmed one of the industry’s worst-kept secrets when it sent out official invites to a Sept. 9 event, where new iPhones are expected to take center stage.

However, there have been indications (including the massive venue the company chose for the event) that more than the new iPhones are on tap. The new Apple TV tops the list of possible announcements.

It’s always possible that Apple will prove us wrong yet again and hold off on introducing the latest Apple TV until a standalone event in October. But one thing seems certain: a new Apple TV will arrive before the holiday shopping season. AAPL would be all but ceding the living room if it doesn’t.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

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Brad Moon has been writing for InvestorPlace.com since 2012. He also writes about stocks for Kiplinger and has been a senior contributor focusing on consumer technology for Forbes since 2015.


Article printed from InvestorPlace Media, https://investorplace.com/2015/08/apple-tv-aapl-new-event/.

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