Why Google, Amazon and Apple are making set-top TV boxes
Google (GOOG) on Wednesday unveiled Android TV, the successor to last year’s Chromecast dongle and the 2010 Google TV. Amazon (AMZN) in April launched Amazon Fire TV. Apple (AAPL) is still noodling with its Apple TV, now in its third or fourth iteration, depending how you count.
None of these devices are expected to be huge money makers. Apple TV generated $1 billion in revenue last year, about a thirtieth of what the iPhone generates each quarter.
So why are they doing it?
The answer, says Creative Strategies’ Ben Bajarin, can be found in the attached chart, taken from Mary Meeker’s Internet trends slide show. It shows consumers around the world spending less time in front of their PCs and more time looking at their smartphones and televisions.
Americans, for example, spend an average of 2 hours and 31 minutes a day staring at their smartphones and 2 hours and 27 minutes staring at their TVs.
“The Web and the desktop are diminishing,” said Bajarin Tuesday on Rene Richie’s Vector podcast. What’s filling the gap is the smartphone and the old stand by — the last unconquered territory — the TV screen.
That’s why Apple, Amazon and Google are racing to build smartphone platforms that are tightly integrated to a box that sits next the TV.
“The mobile will become the gateway,” says Bajarin. “I’m not going to have an Amazon Fire TV box and an Android phone. I’m not going to have an Apple iPhone and a Chrome TV box.”
“The handset you own is going to be the one that wins out.”