) intends to manufacture a television set-top box (STB) to stream
video content, according to
Amazon's set-top box will feature Amazon's online video
offerings, including Prime Instant Video, and on-demand video
service, which includes newfilms and TV shows. The company
expects to launch its own STB by the end of 2013.
The e-commerce giant is dependent on other devices like game
consoles, digital video recorders and Blu-ray players to stream
its expanding video content. The new STB could help Amazon build
its own brand name and broaden its range of hardware products,
including tablets, electronic readers and smartphones.
Amazon has been rapidly expanding its efforts in the video
arena to compete with
), Hulu LLC and others. Lately, the company has been developing
its own original series and beefing up its Prime Instant Video
service through major licensing agreements. The new STB will
provide access to Amazon's expanding video services, which also
include the Amazon Video on Demand store.
Amazon has done exceptionally well in new fields like cloud
computing and tablet computers. Despite being a late entrant to
the STB market, Amazon is likely to succeed on the back of its
innovative ideas. We believe the company's promotional techniques
and strengths will come into play to expand the reach of its
However, competition will be fierce, with most of the large
technology companies foraying into similar Internet-based video
programming businesses. The company will compete with
), which already sells its own set-top box called Apple TV.
Amazon's new device would also compete with products from Roku
Inc. and Boxee Inc., as well as gaming consoles from
) that deliver video programming.
Amazon is one of the leading players in an extremely
fast-growing market. In the first quarter, Amazon's earnings were
well ahead of the Zacks Consensus Estimate of 10 cents. But
revenues of $16.07 billion were down sequentially as well as from
the year-ago quarter.
Amazon currently retains a Zacks Rank #3 (Hold).
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