Will Fire TV Succeed Where Apple and Others Have Not?

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Amazon.com Inc. (NASDAQ: AMZN) announced Monday the availability of its Fire TV streaming video set-top box. Fire TV has its work cut out for it in a field with both established players and other recent entrants.

Like Apple TV from Apple Inc. (NASDAQ: AAPL) and the Roku 3 box, Fire TV’s list price is $99. Chromecast from Google Inc. (NASDAQ: GOOG) costs just $35, but it is a bit more limited than the other devices. Its big benefits are low price and very small size.

Amazon’s CEO Jeff Bezos focused on the “open” approach of Fire TV. Users will be able to view Amazon Prime and Instant Video, of course, but the box also works with Netflix, Hulu Plus, WatchESPN and YouTube. Does it go without saying that users need to purchase subscriptions for these services?

Apple TV generated more than $1 billion in hardware and content sales last year, which works out to about 10 million units, twice the sales volume of 2012. Privately held Roku claims to have shipped 8 million units in the United States since 2008 and that streaming hours rose 70% last year to 1.7 billion. Roku also recently has introduced a Chromecast-like dongle priced at $50 that has a far larger range of programming available than does the Google device and its own remote control device.

But are set-top boxes or dongles the future of streaming TV? Roku has deals for SmartTVs that are set to ship this fall. The company’s goal is to be the platform provider for SmartTVs in the same way that Apple and Google are the platform providers for smartphones. Apple has also been rumored to be on the trail of its own SmartTV for a couple of years now but has released nothing so far.

Oddly perhaps, Roku is generally recognized as the 600-pound gorilla in this group. It may not have sold as many units as Apple, but its offerings are, so far at least, wider and it probably gets more viewer hours than any other system. The small company claims more than 1,200 channels, way ahead of anyone else. How long it can outrun the deep pockets at Apple, Google and now Amazon remains to be seen.

So where does Amazon fit in? It is tempting to say nowhere, but underestimating the power of Amazon is generally a losing proposition. Among the claims for Fire TV are a faster processor, more memory and a usable voice interface, among other things. These may be enough for Amazon to get its foot in the door, but it will need to bring more to the table to win.

Other competitors for the streaming business include Microsoft Corp. (NASDAQ: MSFT) and Sony Corp. (NYSE: SNE). Microsoft’s Xbox One already includes some streaming access, and the capability is coming to PlayStation 4 by the end of the year.

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