Left to its own devices: Roku TVs are going high-end

1/4/24 7:00PM

Box on demand

‍‍Roku is hitting rewind, returning to its roots as a hardware innovator after announcing a “Pro” lineup of TVs, taking the company firmly into competition with other high-end TV manufacturers, with price tags for the new range that could reach close to $1,500.

Entering into the premium market with its own TV — after years of appealing to the masses — is a continuation of Roku’s strategy to get its platform software into as many homes as possible. For a long time, that meant partnering with manufacturers to have Roku software pre-installed.

‍Left to its own devices

‍Having started as an internal project at Netflix, Roku spun-out into its own company in 2008, launching its first set-top box and becoming a crucial enabler of the streaming revolution that let millions of viewers watch whatever they wanted, whenever they wanted. Having sold 10 million devices in its initial 6 years, the Roku boxes became a springboard for a much larger, much more profitable, platform business.

That platform segment, which includes advertising and content distribution, has undergone a remarkable evolution. In 2017, the revenue split between devices and platform was nearly a balanced 50/50. Fast forward to today, and the platform commands an overwhelming 85% of the total revenue.

Indeed, even if its successful in selling TVs for a thousand bucks (or more), Roku probably won’t make that much money from them: the company has sold its devices for less than cost, reporting a negative gross profit margin on its device sales in 4 of the last 5 quarters. Even so, every TV sold is another customer on its all-important platform.

Rani Molla

It turns out Tesla’s Cybercab might need to have a steering wheel and pedals after all

Tesla’s Cybercab was supposed to be a steering-wheel-less alternative to its affordable mass market car.

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Intel romps amid reported attempt to poach a 21-year Taiwan Semiconductor veteran

A report in the Taiwanese press that Intel is attempting to recruit a recently retired top Taiwan Semiconductor executive, Wei-Jen Lo, to lead R&D at Intel’s troubled foundry division may account for the bump in Intel shares Tuesday, one analyst told us.

A synopsis of the report from technology analysis and news outlet TrendForce News notes:

“If confirmed, the move could have significant implications for TSMC and the broader Taiwanese semiconductor industry, especially as Intel aggressively expands its foundry business with support from Washington and backing from tech giants like NVIDIA and SoftBank, the report adds.”

But some skepticism about Lo, 75 years old, returning to Intel, where he worked before joining TSMC in 2004, is also warranted, TrendForce says:

“Industry insiders cited by the report say it is unlikely he would join Intel again, given TSMC’s non-compete rules, Intel’s status as a direct competitor, Lo’s advanced age, health considerations, and his long-standing loyalty to TSMC founder Morris Chang. On the other hand, some industry observers warn that Lo, a U.S. citizen, would be difficult for TSMC to restrict, even with non-compete clauses.”

Intel shares have doubled over the last three months, since the US government took a 10% stake in the company in August. Intel is the best-performing stock in the S&P 500 over that period.

Intel Reportedly Eyes Retired TSMC Veteran Wei-Jen Lo, Advanced Node Pioneer, to Lead R&D

“If confirmed, the move could have significant implications for TSMC and the broader Taiwanese semiconductor industry, especially as Intel aggressively expands its foundry business with support from Washington and backing from tech giants like NVIDIA and SoftBank, the report adds.”

But some skepticism about Lo, 75 years old, returning to Intel, where he worked before joining TSMC in 2004, is also warranted, TrendForce says:

“Industry insiders cited by the report say it is unlikely he would join Intel again, given TSMC’s non-compete rules, Intel’s status as a direct competitor, Lo’s advanced age, health considerations, and his long-standing loyalty to TSMC founder Morris Chang. On the other hand, some industry observers warn that Lo, a U.S. citizen, would be difficult for TSMC to restrict, even with non-compete clauses.”

Intel shares have doubled over the last three months, since the US government took a 10% stake in the company in August. Intel is the best-performing stock in the S&P 500 over that period.

Rani Molla

Eye on AI

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This earnings season, all eyes are on cloud revenue growth

AI computing demand is generating huge revenue streams for hyperscalers, but the market is closely watching the pace of growth, which is slowing.

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Nokia surges as Nvidia invests $1 billion in company, a 2.9% stake

Nvidia is taking a 2.9% stake in Nokia, as the Finnish mobile networking company has successfully pivoted to AI and data center technology.

In a press release announcing the deal, Nokia said:

“Nokia intends to accelerate development of Nokia’s 5G & 6G RAN software to run on NVIDIA’s architecture and will make investments to drive Nokia’s strategic goal of increasing its presence in the AI & Cloud market with data center aligned networking solutions within its Network Infrastructure business. Nokia and NVIDIA have agreed to collaborate on AI networking solutions and explore opportunities to incorporate Nokia’s data center switching and optical technologies in NVIDIA’s future AI infrastructure architecture.”

Nokia’s stock shot up over 20% on news of the deal.

Nvidia to Invest $1 Billion in Nokia in AI Networking Push

“Nokia intends to accelerate development of Nokia’s 5G & 6G RAN software to run on NVIDIA’s architecture and will make investments to drive Nokia’s strategic goal of increasing its presence in the AI & Cloud market with data center aligned networking solutions within its Network Infrastructure business. Nokia and NVIDIA have agreed to collaborate on AI networking solutions and explore opportunities to incorporate Nokia’s data center switching and optical technologies in NVIDIA’s future AI infrastructure architecture.”