This company will benefit most from Apple's move

Apple's CEO Cook made a big announcement, which might be a surprise to many but hopefully not you. In the recent earnings call, Cook told the world that Apple is going aggressively into the video and news streaming business, a direct competition with Netflix. This has virtually made Apple a Media Company, not a simple tech company anymore. Here is what I said not long ago in Jan:   "And more importantly, Apple is transitioning from a hardware business to a services business, which means setback in quarterly iPhone sales will matter less and less in years to come, as services becomes the more meaningful source of revenue." That's why I have never been really worried about the declining iPhone sales as many others were. Yes, weakening iPhone sales has negative impact on its bottom line but it's only a temporary phenomenon. Its impact will become obsolete very soon moving forward. This announcement is just one more concrete step from Apple to show that it is firmly moving into a service company, and fast!


Of course anyone holding Apple should be happy for the move and you can bet it for long term with Apple. But what I think there is a company that may benefit more from this move. I'm sure you all know that video streaming service is not something without competition. Netflix is the pioneer and very successful one. But we start to see more others to come. For example, Google via YouTube is also offering such services. Apple is now joining the game. And Disney is the latest big brother to join the race. For sure there will be more to come moving forward. You can of course subscribe to each video streaming service separately but there is an easier way to watch streamed video from different sources. That's right, via a device called Roku.  Roku plugs into your TV using an HDMI cable, connected from your TV to the Roku device. The Roku is then connected to the internet via a wired or wireless connection to your home network. Roku works by downloading video from the internet, you then watch on your TV. I think Roku will be the big winner with Apple's aggressive infringement into this field. Roku doesn't own television shows or films, but it gives the user the ability to stream video from any of the main streaming services and even from other places on the web. Apple includes Roku on its list of compatible devices. The market has already seen the potential for Roku and it jumped by 5% higher the moment Cook made the announcement. Right now Roku has nearly 40% of the market share for the Over-The-Top market, a clear leader for this business.


Be aware though, I don't mean Roku is a good buy at the current price as it is quite pricy already. While I think its long term prospect is very bright, its near term TA seems shaking to my eyes. But it will be a good buy at further weakness.