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Roku supply chain activity rolled over in January after Q4 surge

China 2768 Earnings 583 Info Tech - Tech Hardware 681 Mexico 787 Quote Watch 351 U.S. 4927

Entertainment platform provider Roku reported Q4’20 revenues which rose by 58.0% year over year, including an 81.5% rise in platform (software) revenues and a 17.8% rise in player (hardware) revenues. That  outpaced analysts’ estimates by 4.7 percentage points according to S&P CapitalIQ data. The firm is also acquiring Nielsen’s Advanced Video Advertising business, Gizmodo reports, to improve the value of its advertising operations. 

The firm nonetheless still relies in part on the rollout of devices, including its own set-top boxes as well as televisions with embedded technology, for its growth. Panjiva’s data shows U.S. imports of set-top boxes and televisions increased steadily during the pandemic with growth of 10.5% year over year in Q4’20.

There’s also been a marked shift in the mix of production resulting from the trade war between the U.S. and China. The share of televisions imported from China (including Hong Kong) dropped to 19.0% in 2020 compared to 40.6% in 2018 while the share from Mexico increased to 69.0% from 53.9%.

Mexico becomes dominant supplier of TV systems to U.S.

Chart segments U.S. imports of televisions and set-top boxes by origin on a monthly and three-month average basis. Source: Panjiva

Roku also recently launched a sound-bar based product which may drive additional growth. It’s worth noting that shipments of players are seasonal with “seasonally lower player (profit) margins based on our holiday promotionsaccording to CFO Steve Louden. Panjiva’s data shows U.S. seaborne imports linked to the firm, including the sound bars, climbed 47.8% higher year over year in Q4’20. 

Yet, there’s been a downturn of 50.3% year over year in January, potentially reflecting difficulties in receiving deliveries due to ongoing port congestion as discussed in Panjiva’s Feb. 24 research. Among other set-top box makers have seen similar challenges with imports linked to Dish Networks down by 63.8% in January after a 67.1% jump in Q4’20 while those linked to Humax and Pegatron were unchanged and fell by 64.6% respectively.

Set top box imports reverse course in 2021

Chart segments U.S. seaborne imports of televisions and set-top boxes to the U.S. by consignee. Source: Panjiva

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