John Paczkowski

Recent Posts by John Paczkowski

I’m Apple TV! And Someday … I’m Gonna Be a Real Business!

Apple sold 1.3 million Apple TVs in its latest quarter. That’s double what it sold during the same period a year ago, and enough to bring the grand total for units sold this fiscal year to five million. But still the company insists on referring to it as the “hobby” that Apple co-founder Steve Jobs described it as at our D8 conference.

“The [Apple TV] business continues to grow well,” Apple CEO Tim Cook said during Apple’s fourth-quarter earnings call. “But if you look at the revenue, it’s quite small. So it still has the hobby label. But it’s a beloved hobby, and we continue to focus on it; we believe there’s something there. So we’ll continue to pull the string and see where it takes us.”

In other words, the reason Apple considers Apple TV a hobby is that the device simply doesn’t bring in enough money.


That’s essentially a distillation of the same rationale Cook described in greater detail at our D10 conference earlier this year.

“We’re not a hobby kind of company, as you know,” he said during his onstage interview. “Our tendency is to do very few things — to put all of our wood behind a few arrows. And if something isn’t a big success, we get it out of the way and move on and put our energies into something else. But we’ve stuck with Apple TV.”

“Now, it’s not a fifth leg of the stool,” Cook said, referring to Apple’s four-legged stool: iPhone, iPad, Mac and iPod. “It’s not of the same market size as our iPhone business or the Mac business or the music business or the tablet business. It’s not like that. But last year we sold about a little less than three million Apple TVs — 2.8 million. This year, just in the first six months of our year, we’ve sold 2.7 million. …

“So this is an area of intense interest for us. For many of us, the TV that we do watch is almost exclusively on the Apple TV. That’s what my TV watching is. All of my movies, everything is coming through Apple TV. And so the customer satisfaction with that product is incredible. It’s off the charts. So we’re going to keep pulling the string and see where it takes us. I think … many people would say that TV is an area of their life that they’re not really pleased with. They’re just unhappy with the whole TV experience. So this is an interesting area and we’ll have to see what we do. But right now, our contribution is Apple TV, and I feel really good about it.”

Fair enough. Clearly, Cook shares Jobs’s wariness of the broader TV market, one that troubled him because of the difficulties it presents in rolling out a viable go-to-market strategy. Here’s some 2010 video of Jobs speaking to that issue at D8:

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work