Needham's Laura Martin Offers A Few Reasons Roku Shouldn't Be Affected By Amazon's Apple TV, Chromecast Offering

Amazon.com, Inc. AMZN’s reintroduction of Apple Inc. AAPL and Alphabet Inc GOOGL video streaming devices prompted a sharp selloff in Roku Inc ROKU Thursday (though the stock moved up 13 percent Friday).

Some bullish experts were undeterred by the news.

There Are Better Channels

Needham analyst Laura Martin suggested Amazon is not necessarily a critical channel for the product category. By her estimates, consumers are more inclined to shop for video streamers at brick-and-mortar retailers rather than online.

“My gut feeling is that a lot of these devices are sold at Best Buy Co Inc BBY,” Martin told Benzinga in a phone interview Friday.

Roku Is More Than A Device

Roku’s revenue isn't entirely dependent on the device and is partly composed of streaming services, which are seen to be similarly unaffected by Amazon’s product sales.

Martin posited that 800,000 of Roku’s 1.6 million subs sold last quarter were attributed not to Roku hardware but to TVs sold with the platform built in.

The Timing Is A Bit Late

Additionally, the timing isn’t necessarily to Apple or Google’s advantage. The pair likely intended to leverage holiday interest and online shopping surges to boost their biggest quarter, but Martin intimated that they may have taken too long to make their move.

“They’ve got 10 days before Christmas, so good for them that they got this done before Christmas, but it’s 10 days,” she said.

They Don’t Compete, Anyway

At the same time, Martin doesn’t consider Apple TV and Chromecast to directly compete with Roku.

“Apple TV is a really different target market,” she said, comparing its $100-plus price against Roku’s $23 to $49. “There’s really no overlap with Roku purchasers.”

Taylor Cox contributed reporting.

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Image Credit: Mattnad - Own work, CC BY-SA 3.0, via Wikimedia Commons