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Apple Inc. (AAPL) Is Leaving Dollars Here

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It’s not pretty when Apple Inc. (NASDAQ:AAPL) is on the wrong end of a trend, and that’s exactly what’s happening these days with Apple TV.

Apple Inc. (NASDAQ:AAPL)

Apple Inc. (NASDAQ:AAPL) may have finally gotten it right with its digital media receiver the third time around. Shrinking the size, lowering the price, and enhancing the streaming features have helped the consumer-tech giant sell millions of its portable set-top gadgets.

Still, it’s not enough.

Marketing researcher Diffusion Group is out with its latest “Defining the In-Home CE and Network Ecosystem” 2013 report, and it doesn’t bode well for Apple TV.

  • Just 14% of all broadband households own a dedicated streaming device, including Apple TV and market leader Roku’s portable solutions.
  • A larger 25% of broadband households own smart TVs, the Web-enabled high-def televisions that make a digital-media receiver a redundant purchase.
  • Here’s the scary part: Smart televisions and dedicated streaming devices accounted for 12% penetration a year earlier. In other words, smart TVs are the hot trend by more than doubling market penetration over the past year.

Sure, the same study shows that just 69% of smart TVs are actually connected to the Internet. There are a lot of people out there buying Ferraris to drive through school speed zones. That’s even worse for Apple Inc. (NASDAQ:AAPL), since the next wave of adopters has already invested a premium to make sure they won’t need a standalone digital-media receiver in the future.

Microsoft Corporation (NASDAQ:MSFT) 1, Apple 0

It should also be fairly obvious that a lot of homes that don’t own smart TVs are using their Xbox 360, PlayStation, and Wii consoles as digital media receivers. A whopping 62% of broadband households have a next-generation console.

Microsoft Corporation (NASDAQ:MSFT)‘s the top dog here, with an installed based of 76 million consoles. A seemingly insurmountable 46 million are Xbox Live subscribers, already hogtied to cyberspace for their entertainment.

Mr. Softy has been the butt of consumer-tech jokes as PC sales sputter and its mobile operating systems are failing to gain traction against Apple’s iOS and Google Inc (NASDAQ:GOOG)‘s market-trouncing Android. However, when it comes to the Web-embracing future of video entertainment that Apple, Google Inc (NASDAQ:GOOG), and television makers so want to be a part of, it seems as if Microsoft Corporation (NASDAQ:MSFT) is the one getting the last laugh.

Apple needs to put out its long-rumored HDTV product — now — and it wouldn’t hurt if it also raised the bar as a gaming console.

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