While Its Ad Business Drives Revenue, Roku Pushes Deeper Into Hardware

Roku, the maker of popular streaming sticks and boxes, isn’t throwing in the towel on hardware just yet.

While the company revealed earlier this year that most of its revenue now comes from its platform business (led by its advanced advertising capabilities), it is continuing to push forward into hardware as well.

The latest addition? Wireless speakers designed to pair seamlessly with Roku TV.

The company argues that because it controls the software in both the video platform and the speakers, they will deliver a consumer experience better than other wireless speakers.

The speakers will retail for $199.99, though they are available for $149.99 at a pre-order price.

The expansion in hardware is notable given that Roku has been open about seeing platform and advertising as the key growth driver of its business. 

In its last quarterly earnings report, not only did its platform revenue overtake its hardware revenue, but the margins on its platform revenue hovered around 70%, compared to hardware margins of 3%-10%.

Of course, new hardware products like speakers could be an effort to create devices with larger margins, or to create products that further ensconce users in the Roku platform, subsequently helping to boost platform and advertising revenue.

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