‘Seeking Alpha’: Apple TV could potentially add $2-$4 billion in revenue
Posted by Dennis Sellers 
Jun 26, 2008 at 11:08am
If Apple is able to dominate the video market with the Apple TV, as it conquered the digital music market with the iPod, Apple could potentially add an additional US$2 to $4 billion a year in “surreptitious” revenue from sales in the United States alone, analyst Andy Zaky reports for the Seeking Alpha financial analysis site.
“Apple has been, and continues to be, quite secretive regarding the number of Apple TVs that are in circulation,” he writes. ” Apple neither discloses a total unit sales figure for the device, nor does it announce the amount of revenue it receives from Apple TV sales. All we know is that Apple currently uses the subscription method of accounting for Apple TV revenue, much like it does with the iPhone. But instead of allocating a separate line item for the Apple TV on its financial statement, Apple simply records the revenue under one line item called ‘iPhone and Apple TV’—leaving the relevant observer completely ignorant as to both the monetary and market impact of the device. This has led many Wall Street pundits, investors and financial analysts to fully understate the potential influence the Apple TV might have on the video market.”
But he says that this is a smart move for two reasons:
° It eliminates the “potential headline risk commonly associated with the inauguration of a new digital product.”
° If the Apple TV does begin to dominate the market place, Apple will find itself in the advantageous position of being able to frequently post upside surprises to its revenue.
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Contributor
Dennis Sellers
Dennis has been a newspaper editor/reporter (seven years) and teacher (seven years). He has over 4,000 magazine, newspaper and online articles to his credit. He has also covered the Mac and tech industries for over a decade for such online publications as MacCentral, MacMinute and now MacsimumNews.
