Cook: Apple TV sales accelerated in quarter, but still a hobby

During Apple (Nasdaq: AAPL)'s earnings call this week, CEO Tim Cook, while not talking directly about the company's plans for its strategy for the living room, did say that the company's connected device, Apple TV, was "doing actually very well."

"In last fiscal year that ended in September, we sold a bit above 2.8 million units. And just in the past quarter--the December quarter--we set a new quarterly record for Apple TV with over 1.4 million (units)."

But, Cook pointed out in a response to Piper Jaffrey analyst Gene Munster, "if you dollarize this in revenues, we still classify this as a hobby. However, we continue to add things to it...We continue to pull the string to see where it takes us."

The current Apple TV connected device runs on the same processing chip as the original iPad and the iPhone 4; when, and if, it gets an upgrade, may be a sign that Apple has decided to move beyond the hobby stage with it.

Munster has steadily maintained that Apple is likely to launch an Apple HDTV in 2012 and contends consumers want an all-in-one package, not set-top boxes.

In December, meanwhile, Strategy Analytics said Apple TV's share of the connected device market worldwide was expected to be 32 percent in 2011. SA pointed out that the market for devices like Apple TV, Roku and the like was continuing to grow, with about 8 percent of U.S. households now outfitted with a connected device; those numbers are expected to double this year.

With the likelihood of Apple coming to market with a connected HDTV of its own, Strategy Analytics analyst Jia Wu warns competitors in the space to get their game on before the company runs away with the segment entirely.

"Apple is leading this nascent market, which it still considers a ‘hobby,'" said Wu; and he doesn't expect Apple's lead to do anything but grow. "Rival platforms must accelerate their development plans to keep Apple from running away with the connected TV business, as it has done in smartphones and digital music," he said.

For more:
- see this Seeking Alpha transcript

Related articles:
A chicken in every pot and an Apple TV in every living room
Online video's 2011 story a bestseller in the making
Report: Apple pushing ahead with TV plans, talks with media execs
Online content options driving middle class uptake of Smart TVs
Apple TV top OTT device in a market expected to double in 2012