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Analyst: Apple enters digital living room with 10x lead
With this month’s release of the Apple TV, Piper Jaffray analyst Gene Munster says Apple is entering the digital living room market with a 10x lead over the next closet competitor, Microsoft’s Media Center, thanks to the large amount of iTunes users. The analyst estimates that there are approximately 110 million active iTunes users, compared to 12 million active Media Center users. Munster believes the digital living room market in 2008 will be worth $4.7 billion, and is currently expecting Apple to sell 2 million Apple TV units in 2007.
“We believe iTunes is a Trojan horse media center, which will give Apple a significant early lead in the digital living room,” says Munster. “While Apple does not disclose iTunes user base statistics, we estimate that there are at least 110m iTunes users, which represents the preliminary addressable market. To compare, the closest Windows-based product is Windows Media Center, which serves as a media hub for music, TV, and movies on PCs. While the comparison is not apples-to-apples, as Media Center is part of the Windows operating system, we estimate there to be 23m Media Center-enabled PCs. We estimate there are 12m actual Media Center users. (Note: about 40% of all PCs sold in retail stores come with Media Center pre-installed.) In other words, Apple has a 10x headstart in the digital living room.”
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1
Did this so-called “analyst” totally forget about Tivo and Amazon?
I suspect that Amazon Unboxed + Tivo has a userbase significantly higher than Microsoft Media Center, and way more hardware units actually installed in customer’s homes.
Posted by Michael Portuesi on March 16, 2007 at 9:40 AM (PDT)
2
That said, MS does have the XBox they are also trying to leverage that it doesn’t seem like the analyst is taking into account. I don’t think that gives MS much more of a chance, but it does count for something.
Posted by Jeremy on March 16, 2007 at 9:45 AM (PDT)
3
That analysis is so broken. While he admits the comparison is not apples to apples, that is a vast understatement of the complete incompatibility of his comparison. iTunes users do not equal digital living room users, just like Media Center users do not. While many home theatre pc users do use Media Center, many also use beyondtv, mythtv, or many other solutions. I’m not saying that even that combined total approaches the iTunes base, but I am saying that the percentage of iTunes users who will become digital living room users is a much smaller percentage than WMC users who use their PCs for the digital living room. And I’m sure there are many examples, like me, of people who use and love iTunes, but use Media Center for their digital living room.
Posted by Lyle on March 16, 2007 at 10:13 AM (PDT)
4
I want some of whatever it is that Gene smokes.
Posted by dodo on March 16, 2007 at 10:26 AM (PDT)
5
Wacky analysts strike again.
Not apples to apples? Wow what a revelation. You mean 110m potential AppleTV customers with 0 actual customers is not really 10x greater than 23m actual MediaCenter owners of which 12m might be using it? I’m shocked and dismayed
Mostly shocked and dismayed that this passes as news.
Too bad I can’t get paid to say AppleTV will be the biggest non-event in recent Apple history.
Posted by WhoCares on March 16, 2007 at 10:29 AM (PDT)
6
Even if Apple TV sells 2m units in 2007, Windows Media Center with 12m users will still have a 6x lead. I just love Gene’s math.
Posted by dodo on March 16, 2007 at 10:34 AM (PDT)
7
Any company with at least 1 unit in use has an infinite-X headstart over Apple in the digital living room.
Posted by dodo on March 16, 2007 at 10:39 AM (PDT)
8
I am guessing that a very small percentage of those 110m use iTunes to mange or view video content. Most digital video content people own is not in Apple TV compatible formats (quicktime etc) I would wager (at least mine is not), which leads to the Apple TV not being the automatic buy that most analysts make it to be.
Posted by Alberto on March 16, 2007 at 11:05 AM (PDT)
9
Oddly enough, Xbox is left out of the analysis. Although the TV isnt going head to head with the Xbox, that does give MS some presence in the “Digital Living” room
Posted by Miketcool on March 16, 2007 at 5:01 PM (PDT)
10
I just love all these anti-Apple TV comments. 110M iTunes users itching to stream their media to their living room is pretty formidable in any marketing analysis. And just wait until Apple starts it’s own media label/content portal. They will redefine media distribution.
Posted by Fred Falcone on March 19, 2007 at 7:16 PM (PDT)
11
Fred-
It’s not that, it’s just that the analysis is incorrect. Also, why are they comparing an app, ie iTunes, to a hardware/software solution (ie Media Center). How is this a fair comparison?
Posted by w00master on March 20, 2007 at 10:07 AM (PDT)