Roku recently launched a new version of its original Streaming Stick launched in early 2014, with updated features and a smaller form factor. The new Streaming Stick retains the same sub-$50 price point of its predecessor, but now adds a quad-core processor for increased speed and improved user experience.
The new version also has reduced dimensions, thinner in both width and depth, to improve fit compatibility with TVs and installations alongside multiple HDMI devices/cables. Other general capabilities of the new Streaming Stick remain the same, such as dual-band MIMO Wi-Fi, 1080p max resolution, and full-sized remote control common to the Roku 1 and Roku 2.
The new Streaming Stick adds Roku’s Private Listening capability, formerly the domain of only the higher-end Roku 3 and 4 and their accompanying headphone jack-equipped remote. Using the Roku mobile app, users are able to listen to audio during playback with either headphones or connected Bluetooth device.
Roku’s product refresh brings needed improvements and differentiation to the nearly two year old Streaming Stick, which found competition in both price and form factor with the launch of the Amazon Fire TV Stick. The new version takes advantage of newer SoC technology in order to reduce physical package dimensions, reduce total BOM cost, and increase performance at the same time. During side-by-side usage testing, navigation speed is noticeably improved over the previous model, with tangible improvement in the quality of user experience due to higher responsiveness in both navigation and in initiation of content streaming. Overall, the new product is an effective competitive one-up to the Fire TV Stick, which offered dual-core performance and a voice search remote option as competitive differentiators over the basic feature set of the original Roku Streaming Stick.
In general competitive standing, the new Streaming Stick reinforces Roku’s low end product position, and with the new model having removed two of the predecessor’s main tradeoffs versus more expensive Roku models (remote listening and speed of user experience), Roku may find that its new product will be even more successful than the original – potentially at the expense of Roku 1 and Roku 2 sales. Though Roku 1 remains a legacy enablement option that enables over-the-top streaming in households that still have TVs with composite / RCA inputs, the increased power and features of the Streaming Stick raise questions as to Roku 2’s eventual position (or feature set evolution) within the Roku line.
Roku’s new Private Listening feature via the Roku app is functionality that is arguably more powerful than what is available on the Roku 3 and 4, with the capability now available to the user on the smartphone/tablet of their choice, and able to be handed off to any Bluetooth output device connected to that smartphone or tablet, such as a pair of Bluetooth headphones. Though the smaller form factor and substantially increased speed are certainly competitive improvements, this feature is a substantive differentiation over Fire TV Stick and other competitors in terms of audio flexibility, adding physical headphone connectivity; for personal listening options, Amazon’s product is limited to Bluetooth-connected audio devices only.
At the sub-$50 price point, Fire TV Stick will remain the product of choice for consumers of Amazon content services due to its Amazon-first user experience and Alexa-based voice search, but now offers little substantive advantages for mainstream consumers over Roku’s new Streaming Stick. For pure content consumption, in general Roku’s agnostic platform leads competitors in content availability and in the extensiveness of its 30-partner-strong universal search functionality.
Save for radical Amazon Prime member discounts during holiday promotion as seen in the past with Fire TV products, the new Streaming Stick is expected to outperform Amazon’s stick on an everyday head-to-head sales basis.
Due to the tangible improvements to an already-successful product in a high-volume, consumer-friendly price band, IHS has increased Roku’s total retail device forecast to 10.2 million units shipped in 2016. In terms of shipments for the year, Roku will remain in third behind Google’s category-leading Chromecast at 12.5 million units, and Apple TV at 11.4 million units.Though the Google Chromecast’s accessible price is expected to keep it the world’s most-purchased streaming device for several years, and Apple TV benefits from its ties to the ever-growing iOS device installed base, the race between Roku and Apple TV is expected to get considerably tighter over the next two years. Roku’s progress is expected to continue building steadily, with a strengthened low-cost proposition now augmenting its overall mainstream appeal as the company expands gradually into new geographic markets.