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If you have ever shopped for an Amazon Fire TV Stick or an Apple TV, you likely noticed a rather substantial price difference between the two. Apple TVs start at $199, while Amazon Fire TV Sticks usually go for about $59.99, depending on the model, and for even less with discount sales. That’s a pretty big gap, and while some of it can be attributed to Apple’s strong track record of delivering premium-quality devices, that’s only part of the reason. 

Namely, the Fire TV Stick is likely designed to be a so-called “loss leader,” which is a tactic businesses use to sell something at low cost (or even at a loss) to draw in customers and encourage them to buy other, more expensive products. Way back in 2012, Jeff Bezos admitted that the company sells hardware at cost. He stated that Amazon wants to earn money when customers use its devices, rather than through pure sales.

As a somewhat expected result of said tactic, the company collects your data to then serve you ads. Advertising is a huge business for Amazon. If you have ever used an Amazon service, you’ve likely noticed a large number of ads. Connected TV advertising is generally on the rise, with some estimates that in 2025, the connected TV advertising market reached $33.35 billion in the United States alone. Now, add the more than 250 million Fire TV devices sold globally, and the math speaks for itself.

The company doesn’t really hide the fact that it uses your data for advertising purposes, among other things. Besides doing some objectively useful things better than a smart TV, Fire TV Sticks can collect data about the applications you use, movies and TV shows you watch, voice requests through Alexa, search history, your location, and more. All of this is used to measure advertising and serve you targeted ads. Amazon also says that it sometimes includes third-party advertising as well, providing your data to advertisers to serve more useful and relevant ads.

Basically, the company wants you to be a part of its advertising ecosystem. For instance, while using your Fire TV Stick, Amazon can (and will) show you ads encouraging you to subscribe to Amazon Prime (which also has its own ads), rent a movie, shop, or do anything else related to the company’s services. This means that the online retailer doesn’t have to make a profit from device sales and can afford the low price if it earns revenue from active use and advertising. This is largely different from Apple TV, where the main focus is on hardware and performance, hence the premium price.

In July 2024, the Wall Street Journal reported that Amazon sold its Echo speakers and other smart gadgets at low prices, hoping to make up the profit through other parts of the business. Hence, it’s not that far-fetched (one would say it’s logical) to assume that this is also the strategy with Fire TV Sticks, and a reason why the Fire TV Stick is cheaper than the Apple TV. Plus, to be fair, compared to other major smart TV devices, Apple TV just does some things better.