Amazon has finally hit the market with its own over-the-top streaming video box.
Amazon Fire TV is joining an increasingly crowded market for OTT set-tops, all offering access to pretty much the same set of services and apps, such as Netflix, Pandora, and Amazon's own Amazon Prime streaming service. The Fire TV arrives with a $99 price tag, the same at the AppleTV, and the most expensive Roku box.
Amazon vice president Peter Larsen said the retailer sells millions of streaming media devices each year, and its own box is an effort to address three complaints it commonly hears from customers: search is too clunky, there is not an open ecosystem that allows people to use several different streaming systems, and performance isn't good enough.
The Fire TV device is roughly the size of a multi-disk CD case. It integrates a quad-core processor that Amazon claims has 3 times the processing power of Apple TV and Roku, a dedicated Adreno 320 graphics engine, and 2 GB of memory – Amazon says that’s 4 times the memory built into AppleTV, Roku, and Chromecast. It runs the Android operating system.
It comes with a Bluetooth remote, which takes voice input.
It offers Netflix, Hulu and other streaming channels in addition to Amazon Prime instant video. Customers will get a free 30-day trial subscription to Netflix and Amazon Prime when they buy a Fire TV.
Fire TV also offers other services, including channels like YouTube and Pandora and "Free Time," a customizable interface for children. Fire TV will be bundled with thousands of free and paid games like Minecraft and Disney Pixar's Monsters University starting next month. Games can be played using the remote. An optional Fire game controller will be available for $39.99.
Amazon was one of the companies long thought to be preparing an over-the-top video service and an associated streaming device. Roku, Sony, and Apple (and others) already have such systems on the market. Sony and Apple may yet introduce services, and maybe new boxes to deliver them. Intel, unable to establish a service, bagged its whole effort and sold its technology to Verizon.
One analyst called the offering "underwhelming."
Wedbush Securities analyst Michael Pachter said the device is too expensive, considering that it doesn't offer notably more than similarly priced devices. Apple TV is $99 and the top tier Roku is also $99, although it makes cheaper versions. Google's Chromecast is $35.
He also said Amazon missed a chance to lure more Prime customers by offering six-months free of the service to Fire TV owners.
"I don't really get it," he said. "There's no real meaningful advantage to buying the box."
CRT Inc. analyst Neil Doshi was more positive.
"While we believe that Amazon may be overstating consumer frustration with competing products, Fire TV appears to offer a significant step forward in terms of content search, hardware performance and openness," he wrote in a note to investors. "We expect that FireTV should sell well and further bolster Amazon Prime's ecosystem."
Amazon's announcement comes as the online retailer faces increasing pressure to boost its bottom line after years of furious growth. As more Americans shop online, Amazon has spent heavily to expand its business into new areas — from movie streaming to e-readers and groceries — often at the expense of its profit.
Meanwhile, Amazon.com Inc. has invested heavily on making TV shows and movies available to customers who pay $99 a year for Amazon Prime. It currently offers 200,000 TV shows and movies for rent or purchase.Amazon recently boosted the annual fee to $99 from $79 annually. Members benefit from two-day shipping of certain items and access to videos including original series like "Betas" and "Alpha House."
Currently, the service relies on third-party devices like the Roku box to stream its programs to TVs. AmazonFire TV will be sold on Amazon's site, Best Buy, Staples and other retailers coming soon.
The Associated Press contributed to this report.