Amazon today announced its entrant in the consumer set top box space, the Fire TV, which will cost $99. The comment below may be attributed to Jan Dawson, Chief Analyst at Jackdaw Research:
Amazon’s Fire TV device brings greater power to the consumer set top box space, at a price. In contrast to its tablet pricing, which has undercut major competitors, Amazon has instead focused on boosting the specs and performance, at a price. The $99 price point means Amazon is going head to head against Apple TV, and will be significantly more expensive than Google’s Chromecast and several of Roku’s offerings. Together with the recent increase in the price of Amazon Prime, this appears to signal a greater conservatism on the part of Amazon on pricing.
The box itself largely takes the approach of doing the same things as other set top boxes, but doing them better. The exceptions are voice search and gaming, where Amazon has gone significantly beyond what other consumer TV boxes offer. Voice search is notoriously fickle, and it’s not an area where Amazon has a lot of experience, so we’ll have to wait for the first reviews to see if it’s any good. If it does work, it’ll be a significant improvement on the text input functions on other major boxes. The games feature mimics Roku’s games features, but goes significantly beyond them, building on its existing relationships with game developers through the Amazon App Store for Android.
The big question is what Apple has up its sleeve for Apple TV. Amazon is embracing the fragmentation that exists in the TV space today, offering an impressive array of third party video apps on the Fire TV while also creating exclusive content on its own channels. But the great opportunity in the TV space is to bring unification rather than fragmentation to consumers, creating a single unified service and interface for video across multiple devices. That’s where Apple has a great opportunity, and if it is able to take advantage of that opportunity, it could provide significantly more value than Amazon has here. (For more on this concept, see this blog post).