Even as Amazon (NASDAQ: AMZN) announced the availability of more channels and apps on its new Fire TV, a sour note sounded for one streaming device maker. Apple TV (NASDAQ: AAPL) sales are slowing, even as the market continues to grow, a new Strategy Analytics report says.
Apple TV's share of the worldwide OTT streaming device market has fallen 10 points since 2012, from claiming 38 percent of sales two years ago to 27 percent in 2014. Apple sold 1.9 million units in the second quarter, the research firm estimated.
The report comes a couple months after a Parks Associates study found that sales of Google's (NASDAQ: GOOG) Chromecast streaming device were flat in the first quarter. Google refuted that claim, saying that usage is up 40 percent compared to Q3 2013.
At the same time, sales of streaming devices are jumping: Strategy Analytics forecast that the segment will rise 54 percent this year compared to 2013, climbing to more than 35 million units sold. Parks' June connected devices study found that 20 percent of U.S. households have a streaming device, up from 14 percent in 2012.
The jump clearly indicates strong demand for OTT streaming products. So, why is Apple's star falling?
It's all about the features, the report says. For example, Amazon announced this week that it has doubled the app selection on its Fire TV, which was launched in the first quarter. Those apps include sports channels like WWE Online and MLB TV, several ABC online channels and WatchDisney channels, A+E and Lifetime, among others. Fire TV's online gaming capability is another bonus: It added an exclusive "Flappy Birds Family" app and Grand Theft Auto: San Andreas to its list along with other game titles--something Apple TV doesn't offer.
Meantime, Google's Chromecast device, despite reports of waning popularity, allows users to "cast" online video and other media from their PC or tablet to their TV screen--a feature that many of its users say was key to their purchasing decision.
"Google and Amazon have staked their claims on the OTT Streamer segment and now the aging Apple TV is lacking features like voice control, gaming support, and most of all, an open app store," said David Watkins, service director, connected home devices for Strategy Analytics, and the report's author. "Many of those features are rumored to be part of the next generation Apple TV, but delays are impeding its chance to succeed before Google's Android TV and Amazon's Fire TV grab a foothold in the market."
Apple's market share has fallen even while OTT streaming device sales soar. (Source: Strategy Analytics)
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