Apple TV’s $299 Price Makes It Harder to Recommend

Apple has updated its TV hardware, but the new Apple TV 4K starts at $299. That price puts the box in a difficult position: it has to persuade buyers to spend considerably more than they would on competing streamers, even as many TVs already include software that can run the same services.

The hardware update follows an argument over whether Apple TV still has a place in the market. This summer, I defended the device after analyst Dan Rayburn said it was “essentially dead” because customers wouldn’t pay $200 for a streaming box. My point was that Apple TV could keep serving a smaller, profitable audience, but Apple needed to give it more attention through new hardware, operating system improvements and a more approachable price.

Now the product has new hardware, and its price has climbed again. Rayburn put the problem more carefully this week, saying the $299 device “won’t appeal to the masses.” That seems right. A product doesn’t need to dominate sales to be worth making, but the higher price makes Apple’s case harder with anyone who isn’t already committed to its ecosystem.

Built-in TV software raises the bar

Most new TVs arrive with their own streaming software and apps. On a visit to Costco, it’s easy to find large, inexpensive sets with systems from Roku, Amazon, Samsung or Google already installed. Buyers can connect to streaming services without purchasing a separate box at all.

Those built-in systems have limits. They can feel slow or awkward, and some rely on tracking practices that will put off privacy-conscious viewers. That leaves a real audience for a dedicated streamer, including people who want a faster, cleaner interface. But it’s a smaller group than the total number of TV owners, and the embedded software is often good enough for everyone else.

That shift also leaves budget streaming sticks with less of a clear purpose. A cheap stick once offered an easy way to add streaming apps to a TV. Now the apps are often already there, and an inexpensive stick may not feel like an upgrade. The buyer willing to add a separate device is increasingly looking for a noticeably better experience, which gives higher-end streamers a reason to exist but makes their price especially important.

Apple’s main rivals set a much lower bar. Amazon’s Fire TV Cube costs $199, Roku’s Ultra is $149, and the Google TV streamer is $150. I’ve called Google’s device my favorite non-Apple option. When Apple TV started at $199, it was more expensive than the cheapest alternatives but still within the same general range. At $299, a recommendation becomes much harder to make to someone simply frustrated with a sluggish TV menu.

A cheaper Apple TV could widen its audience

Apple has previously sold a less expensive Apple TV 4K alongside a better-equipped version. The cheaper model gave up Ethernet and included less storage, which could suit people who didn’t need those extras. This time, there’s just one model. Some commentators have welcomed that as a simpler product range, but a pared-down option would give buyers a lower entry price and let them choose which features matter.

Apple’s iPhone range makes a useful comparison: removing lower-priced or differently equipped models might make the lineup shorter, but it would also leave fewer choices for customers with different budgets and needs. A streaming box doesn’t need a long list of versions, but one more affordable configuration could help Apple reach people who want tvOS without paying for every feature.

There are a few plausible explanations for the single-model launch. Apple may have decided that tvOS is a niche product for its most devoted customers and isn’t trying to compete for buyers at lower prices. That would be a disappointing reading of the company’s plans, but it can’t be ruled out.

Another possibility is that chip availability and costs shaped the release. Apple may have chosen to launch the fully equipped version first, aimed at customers who are ready to pay for it, and could add a less expensive model later. That lower-priced device might have less storage, fewer microphones or no Ethernet port.

A third option is a different, simpler product, often described as an “Apple TV Stick.” It could reach a lower price by taking a different form instead of trimming features from the existing box. Whether that product would be useful is less clear. A less expensive Apple TV 4K could already address much of the same demand, though some buyers, including hotels, might prefer a device that is simpler to install. I recently saw Apple TV boxes fitted behind the televisions in a hotel room, but I don’t know whether hotels want a different setup.

I still think tvOS offers the best TV streaming interface, despite its limitations. That experience matters to people who don’t want to rely on the software built into their television, and Apple has a reason to keep the product useful for them. The new hardware gives those viewers something fresh to consider. The $299 starting price, though, may keep many potential buyers on the sidelines. A less expensive option would make Apple TV easier to recommend and give tvOS a better chance of staying relevant beyond its most committed fans.