Vito Fun/flickr It's IPO time for cord cutting.

Roku, the Silicon Valley maker of boxes that let you stream TV shows over the internet instead of paying a monthly cable bill, is going public.

It's an important moment in a tech storyline that’s been unfolding over the past several years.

Roku's IPO is Wall Street's way of acknowledging that a major disruptive force is upending the media, cable and entertainment industries. Cord cutting isn’t just a fad embraced by tech-savvy millennials; it's a growing business and it's here to stay.

As anyone who invested in Apple at the dawn of the smartphone age a decade ago will attest, getting in early on these kinds of changes can pay off. But although Roku may carry the flag as the first official cord cutting IPO, it remains to be seen whether it’s the right way to bet on the cord cutting phenomenon.

Must-see TV has changed

Roku CEO Anthony Wood Isaac Brekken/AP Roku founder and CEO Anthony Wood sums up the company’s success in a letter to shareholders included in the IPO prospectus:

"Except for sports and a few other live events, you are probably watching a lot less live TV, and with increasing frequency streaming content to your TV.”

If that sounds like the scene in your house, you’re not alone.

TV time is increasingly about watching Netflix and Amazon shows on your own schedule, and less about tuning into the 11 o'clock news.

According to an eMarketer report cited by Roku, there were 25 million U.S. "cord-cutter and cord-never" households in 2016. And that doesn’t account for the people who are currently supplementing their cable TV viewing with healthy streaming habits.

It’s an inexorable trend that Wood suggests can only result in one outcome: the death of cable TV as we know it.

"Just like mainframe operating systems didn’t transition to PCs, and just like PC operating systems didn’t make the transition to phones (is your phone powered by Windows?), TVs will be powered by a purpose-built operating system optimized for streaming."

The next iPhone?

Just because this smartphone-like technology platform shift is happening though, there’s no guarantee that the Roku TV box will be the next iPhone.

For one thing, Apple already makes its own TV streaming device. To date, the Apple TV hasn't been much of a factor in the market, due primarily to its premium price tag. But Apple could choose to lower that price any time if it wants to turn the screws on Roku. Remember the various, low-cost iPod models such as the Shuffle and the Nano?

Or Apple could out-Apple Roku, and introduce some amazing new feature that makes its streaming box far superior to Roku's bare-bones box. Apple had more than 100,000 total employees last year and spent $10 billion dollars on R&D. Roku had 395 employees devoted to R&D as of June 30 and spent $76 million on R&D last year.

That's not to say money and resources are necessary to win the battle. But in the hardware business, where economies of scale benefit supply chains and distribution, being big certainly helps.

Roku is already licensing its technology to certain TV manufacturers, including Hitachi and Sharp, which incorporate its features directly into their products. That provides Roku's business with some security.

But Roku's technology has a ways to go before it becomes a full-fledged platform in the vein of the Windows or Apple iOS operating systems. Those platforms allow users to access applications, from games to productivity tools, that only work with their particular operating system. There's a growing library of apps for Roku, including screen-savers and the Firefox web browser, but there's little to suggest so far that it's become a mainstream consumer phenomenon — the IPO prospectus provides no information about the usage of these apps.

Without a unique offering to "lock" consumers into the Roku platform, there's nothing to stop a TV manufacturer from substituting Roku's streaming technology with someone else's.

That said, one "lock-in" benefit that Roku might be able to leverage with TV manufacturers is its ability to insert ads into the videos that its technology streams — getting a cut of those ads could convince TV manufacturers to stick with Roku.

Content is king

Netflix CEO Reed Hastings REUTERS/ Mike Cassese There's another existential threat hanging over Roku though: content. The company's product is really just a box that transmits other people's content. To do this, Roku secures distribution and licensing agreements with companies like Netflix, Hulu, and Amazon. If those companies ever decide not to renew the agreement, Roku will be in a tough spot.

Netflix alone accounted for one third of the 6.7 billion hours of streaming video that Roku's users watched in the first half of this year. Lucky for Roku, it has deep ties to Netflix — many Roku executives, including the CEO, hail from Netflix, and Roku even rents office space from Netflix.

But a friendly history doesn't mean much when businesses interests no longer align (Google was an early investor in Uber, now the two companies are locked in a bitter legal fight). And with Roku currently in the final year of its Netflix license, investors should not take anything for granted.

Roku says it currently has more than 5,000 video streaming channels available on its service. But there's only a handful that really matter.

None of this is to deny the usefulness of Roku's product, or the small company's incredible accomplishment to date competing in a tough market. As Roku moves closer to its Wall Street debut, the success of its IPO may ultimately be more about investors betting on the company's scrappiness than on the cord-cutting trend.