Roku released new versions of its streaming devices this week, making minor improvements to its cheaper models and announcing a new deal with M-Go, a service that allows people to buy or rent video content. Customers will now be able to buy M-Go offerings through their Roku accounts by pressing a special M-Go button on their Roku remotes.

But life is hard for a small stand-alone hardware company, and Roku will be facing some pretty stiff challenges ahead. Building an appealing product isn't a guarantee of a successful future.

There's a paradox facing Roku: More people use its streaming-video equipment than any other product, even as the company far lags behind Apple in overall sales. Research group Parks Associates recently found that 37 percent of households that have a streaming video device use a Roku as their primary gadget, more than the 21 percent using Apple TV or any other rival device. But Apple TV accounts for 56 percent of all sales of streaming video devices, according a recent estimate by Frost & Sullivan, while Roku remains in distant second with 21 percent of the market.

Roku said this year that it had sold 5 million devices over the past five years. The trick, then, will be to bring in revenue from its modest but highly active user base through deals with content purveyors like M-Go.

From the article, "Roku survival requires taking sales from Apple TV" by Joshua Brustein.

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