December 22, 2010

Apple Expects To Sell 1 Million Apple TV Units

Apple Inc expects sales of its Apple TV to surpass 1 million units this week, which shows that Web to TV services are gaining popularity.

Apple also said Tuesday that iTunes users are now renting and buying more than 400,000 TV shows and more than 150,000 movies a day.

Daniel Ernst, an analyst with Hudson Square Research, said reaching a million units is a "real benchmark." He told Reuters that Apple is "within shooting range of some of the smaller cable operators like Cablevision with 3 million subscribers."

Apple introduced a smaller, less expensive version of its Apple TV in September. The $99 version stepped up Apple's battle with the likes of Google and Microsoft, which are vying for control of the Internet television market.

Microsoft is in talks with several media companies to license TV networks for a new Internet pay-television subscription service through Xbox.

Google, which had high hopes for its Google TV service, has asked manufacturers to delay the launch of TV sets featuring the service, according to a report. Google TV has been receiving uninspiring reviews.

"It's definitely interesting," BGC Partners analyst

Collin Gillis told Reuters, referring to Apple TV sales. "It's a milestone that Google has not reached."

Web-to-TV services have raised concerns that people will drop their expensive pay TV subscriptions, a practice known as "cord cutting." US pay television subscriptions have dropped for two consecutive quarters -- the first consecutive decline recorded.

Although, Gillis noted, consumers are slow to adopt changes concerning home entertainment. "Inertia in the living room is strong."

The popularity of Web-to-TV devices depends mainly on the amount of programming available.

Apple has already made deals with ABC, Fox and Netflix for some limited TV shows and movies.

Apple shares were up 0.6 percent at $323.99 on the NASDAQ Tuesday morning.


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