One of the biggest clues that 2015 would be the year of Over-the-Top (OTT) content delivery emerged recently with rumors that Apple TV would launch a “skinny” OTT streaming service as early as this fall. The new Apple TV, which will be supported by a new app store specifically tailored to TV, should be viewed as a frontal assault on cable TV providers.
Suddenly, the Apple TV play the iconic Steve Jobs once referred to as a hobby, is poised to cash in on a monster business opportunity. CEO Tim Cook recently revealed that his company has sold 25 million Apple TV devices so far – and is prepared to do whatever it takes to dominate the space. Cook announced plans to cut the price of Apple’s set-top box to $69, down from $99. The new rumors come as the HBO Now streaming service is prepared to launch in April exclusively on Apple devices – at least for now. For $14.99 a month, the cord-cutter friendly service delivers direct, in-app purchases of HBO Now to Apple device customers.[subscribe_reminder]
The new Apple TV reportedly will feature the company’s A8 system on a chip – the same technology that powers the iPad Air 2, which is capable of supporting 4K video and gaming. The upgraded Apple TV also boasts Siri voice control and other enhancements. Rumors suggest Apple TV will bundle about 25 channels – anchored by major broadcast networks like CBS, ABC and Fox for between $25 and $40 a month. Apple will up the ante further by releasing an upgraded set-top box at its World Wide Developer Conference in June, according to a report in BuzzFeed.
But to truly gauge the impact of the new Apple TV, it helps to follow the money. A recent survey by Baird Equity Research pointed out that Apple could generate $4 billion in annual service revenue if only 10 percent of U.S. broadband households sign up for the service. If the company can capture the same one-tenth of global broadband households, Apple’s service revenue eventually could top $30 billion a year.