Roku says it will start building its own TVs

Roku says it will start building its own TVs

Roku says it will start building its own TVs

Roku (ROKU) announced at CES 2023 in Las Vegas on Wednesday that it will start selling TVs designed and built by itself. The streaming giant currently offers Roku-branded TVs through third-party partners, including TCL, Hisense, and Philips. The change means that Roku will control all aspects of the TV production process itself, instead of relying on those third parties.

The company will offer 11 models with sizes ranging from 24 inches to 75 inches and prices ranging from $119 to $999.

“For the past 20 years, Roku has been instrumental in what is now the primary way to enjoy a great TV series, classic movie, or live sports,” Roku president of devices Mustafa Ozgen said in a statement. release.

Roku announced that it will make its own TVs at CES 2023. (Image: Roku)

Roku announced that it will make its own TVs at CES 2023. (Image: Roku)

“Our goal is to continue to create an even better TV experience for everyone. These Roku-branded TVs will not only complement the current lineup of partner-brand Roku TV models, but will also allow us to enable future smart TV innovations. The streaming revolution has only just begun.”

According to Roku, the original TVs will go on sale in the US this spring and, like the third-party models, they will run on Roku’s proprietary operating system. All sets will come with Roku Voice Remotes, Find My Remote, and Private Listening modes.

In addition to building its own TVs, Roku also announced its new OLED TV reference design to third-party Roku TV partners. The reference design is intended to bring OLED picture quality, which delivers more vibrant colors and deeper blacks, to a broader audience.

Roku’s deepest moves into the hardware space come as the company grapples with sluggish ad sales amid a downturn in the broader digital advertising market. While Roku sells hardware like its streaming devices and TVs, the vast majority of its revenue comes from its platform business, which is made up of ad sales.

In the third quarter of 2022, Roku’s platform business accounted for $670 million of its $761 million in total revenue. Its hardware sales brought in just $91 million.

But that reliance on advertising has hurt Roku in recent quarters. In the second quarter, the company missed Wall Street estimates for revenue and earnings per share, blaming the supply chain crisis and fears of a drop in advertising spending.

And while the company met analyst expectations in the third quarter, its guidance for the fourth quarter was well below expectations, a worrisome sign considering that the fourth quarter should be its best quarter yet.

Those issues have weighed on Roku’s stock price over the past year, sending shares of the streaming giant plummeting more than 80% in the past 12 months.

The company will now have to make sure its latest hardware investments pay off, whether it’s improved hardware revenue or better ad sales by getting more games in front of more consumers’ eyes. Wall Street will just have to wait and see.

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