Can Roku Keep Growing Its Smart TV Market Share?
One of Roku's (NASDAQ: ROKU) biggest strengths over the last few years has been its growing share of the smart TV market. Management says one-third of all smart TVs sold in the U.S. are now Roku TVs, and it accounts for one in every four smart TVs sold in Canada. As it expands into new markets, like Brazil, launching with a TV manufacturing partner has been key to its success.
However, analysts are wary of Roku's ability to keep winning key partnerships with manufacturers. It's a question that's come up on earnings calls. Stephens analyst Kyle Evans expressed his doubts last week in a note to investors. He was particularly doubtful about how long Roku's current partnership with TCL, the biggest Roku TV manufacturer, could continue as is. "We believe Roku has benefited tremendously from TCL's heavy lifting," he wrote. "TCL still isn't participating meaningfully in Roku's downstream advertising/commerce economics."
Roku has said it has no plans to offer revenue sharing to its manufacturing partners. Evans believes TCL and other Roku TV manufacturers may start using Amazon's (NASDAQ: AMZN) Fire TV platform or Google's Android TV if Roku doesn't start offering some kickbacks for manufacturers. Can Roku fend off Amazon and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL)?
Source Fool.com
