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 The square device, which just about fits in the palm of one hand,
streams content from Netflix Inc, Hulu and other video services — much like Apple TV or Google Inc's Chromecast.
It also offers a prominent platform for Amazon's own fast-growing
streaming video service as well as its growing slate of original
television programs and games. Amazon will also sell a separate
controller for gaming that costs $39.99.
Amazon, which has been building its multimedia presence to tap the
growing appetite for digital media, is now jumping headlong into the
heated competition for consumers' attention and an estimated $70
billion TV ad market. It took the wraps off the Fire TV at a rare
Apple-style media event in New York.
Analysts were split on Amazon's prospects. Some said its strategy to
pitch the Fire TV as an option for casual gamers would set the box
apart. Others were disappointed Amazon did not undercut its rivals'
prices in keeping with its pricing strategy on the original Kindle
Fire tablet.
"They created a product we didn't need," said Wedbush analyst
Michael Pachter.
The Fire TV competes in a market that is set to grow by 24 percent
this year, Strategy Analytics said. But that's off a low base:
streaming boxes have still not made much of a splash, partly because
game consoles from Microsoft, Sony and Nintendo — not to mention
"smart" TVs and DVD players — already stream Netflix and other
popular services.
Tech leaders from Microsoft Corp to Apple Inc are vying for space on
the TV, the traditional family entertainment center and where
Americans used to spend most of their leisure time. That has changed
with the advent of the smartphone and tablet.
The device is one of several initiatives by Amazon, one of the
world's largest online retailers, to play a central role in how
consumers shop and spend their leisure time. Its projects range from
building more warehouses to expand its same-day delivery service to
developing original television shows such as the political comedy
"Alpha House" starring John Goodman.
If Fire TV takes off, it could help shape the way consumers shop
online. Fire TV viewers may eventually be able to use their remote
to buy a product directly off a commercial, analysts said, as
Amazon's multimedia and online retail businesses become even more
integrated.
"The company will eventually want to help you buy things in the
living room," Forrester Research analyst James McQuivey said. "Only
Amazon can piece that entire experience together in the living room
and though we don't see evidence of that ambition here today, we
should assume Amazon knows this and is planning on it."
While the company tried to one-up existing streaming boxes with
voice-activation and a line-up of games from publishers like
Electronic Arts and Walt Disney Co, some remained doubtful the Fire
TV will make waves upon debut.
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JOHNNY-COME-LATELY
Amazon's biggest previous foray into tech hardware — the Kindle
e-reader — succeeded because it was an early entrant in a nascent
market. But the Fire TV is a latecomer to two markets that rivals
had fought over for years — gaming and home entertainment.
Amazon has to wedge itself into a market split fairly evenly between
various nascent technologies, all of which are challenging cable
companies' traditional death-grip on TV viewing.
But the company promised however that Fire TV, available now on
Amazon.com, would be faster and easier to use than Apple TV,
Google's Chromecast or Roku Inc's streaming video device.
It can predict what the user will watch and cue it up, Kindle unit
vice president Peter Larsen said. It also has a feature that uses
data from IMDB to identify the music on screen as well as the actors
and their filmography as they exit and enter the screen on TV.
"When we look at the living room, how do we make the complexity
disappear?" Larsen said at a rare, Apple-style New York product
launch event.
Fire TV's remote features a microphone that enables voice-activated
search. Fire TV is integrated with Hulu Plus so users can see Amazon
shows from their Hulu account, and Amazon said it may bring in other
partners soon.
By next month, Fire TV users will be able to play thousands of video
games. Amazon decided to develop the device after reading customer
complaints on its website about lagging performance, cumbersome
search and closed "ecosystems" on rival set-top boxes.
Shares in Amazon ended down 0.3 percent at $341.96 on Nasdaq.
(Additional reporting by Liana Baker in New York,
editing by Richard
Chang, Edwin Chan and Andrew Hay)
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