Is Roku Making a Big Mistake?
A not-so-secret ingredient in Roku's (NASDAQ: ROKU) success over the years has been its agnosticism. It plays nice with most streaming applications, explaining why there are thousands of apps available to anyone on the Roku ecosystem. It's also partnered with third-party television manufacturers to make Roku the default operating system on their smart TVs, explaining why more than a third of all smart TVs sold in the U.S. fire up Roku as a factory-installed feature. Is Roku starting to get too hungry for its own good?
The company announced on Wednesday that it will be rolling out its own Roku-branded HD and 4K TVs in the spring. Unlike the licensing deals that it has struck with TCL, Philips, Hisense, and others over the years that simply involve providing its popular operating system, the new Roku Select and Roku Plus TVs will be the first to be both designed and made by the streaming video pioneer itself.
Roku shares moved higher at the open on Wednesday, so apparently the market doesn't think this is a bad idea. Yet as a long-term bull and shareholder in Roku, I'm not so sure that this is a good direction for the company to be taking right now.
Source Fool.com
