At $1 Billion in Sales, Apple TV is a Rapidly Growing Drop in the Bucket

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Apple TV has grown beyond a hobby, according to CEO Tim Cook. With a decent profit margin and strong growth, there is reason to believe it will be an important part of Apple's future.

Image: Flickr, James Thompson

By Jason Abbruzzese2014-02-28 21:16:51 UTC

Some people have Etsy shops or play a bit of poker on the side. But when Apple has a hobby, it turns into a rapidly growing business that has become a foothold in the living rooms of millions.

CEO Tim Cook said on Friday that Apple had sold more than $1 billion worth of Apple TVs in the last year, according to Reuters. He went on to admit that the "hobby" label that had been applied to the little black box may no longer be appropriate.

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It is also worth noting that this number includes content sales and takes into account Apple's fiscal year, according to Peter Kafka at Re/Code .

A billion dollars just isn't a lot of money for Apple. The company brought in $170.9 billion in 2013, with iPhone sales leading the company's product lines. While Apple TV might not be a hobby, it's still a side job.

Of course, the same thing could have been said about the iPod when it was first introduced by what had been a computer maker. More recently, Apple TV received its own section on the company website, a small but tacit acknowledgment that the product is not going anywhere.

Analyst Horace Dediu, one of the sharpest Apple watchers around, estimates that Apple TV is the company's fastest growing product.

In addition to the growth, there are some very real reasons to believe that Apple TV is truly the living room product that the company will be pushing for years to come.

Recent reports claimed that Apple was preparing to launch a new version of its television content box later this year and possibly sign a deal with Time Warner Cable, although the Comcast merger puts those plans in peril.

Rumors have swirled for years that Apple would launch a smart TV set to expand its ecosystem, particularly as the barriers between content on computers, mobile devices and televisions fall. With the Apple TV gaining traction, that vision is on its way to being realized. But Apple wouldn't be Apple if it didn't make financial sense.

Putting a TV in every home would be great, but even high-end televisions have pretty low margins and plenty established of competition.

Apple TV, meanwhile, has reasonably good margins and competes with cable companies (not exactly hardware behemoths) and startups like Roku.

As such, Apple is on its way to fulfilling predictions that it would make its way into living rooms; the company just figured out a slightly better way to do so.

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Topics: apple, Apple TV, Media, Tech, Television