Amazon's Set-Top Box Poses New Threat to Intel, Apple


While some analysts had predicted that Apple (NASDAQ: AAPL ) or Intel (NASDAQ: INTC ) would lead television to the next generation , there is a third player approaching that could challenge their supremacy. According to Bloomberg , Amazon (NASDAQ: AMZN ) plans to release a set-top box that will allow consumers to stream video to their TV sets. Amazon's Lab126 division is reportedly developing the box, which does not yet have a release date but is expected to arrive this year.

Lab126 just happens to be located in Cupertino, California -- the same city that is famous for housing Apple's massive headquarters.

Not much else is known about the set-top box, but it is assumed that Amazon will use the device to strengthen its existing slate of online video options. However, it is very unlikely that Amazon would release a set-top box for that reason alone.

Consumers already have dozens (if not hundreds) of ways to view Amazon Prime. There are several set-top boxes, built-in TV apps and other tools for bringing Prime into the living room.

Historically, set-top boxes do not produce record-breaking sales number on their own. While Roku, Apple TV and other existing boxes offer many intriguing options, Sony's (NYSE: SNE ) PlayStation 3 is the most popular device used to stream Netflix (NASDAQ: NFLX ) in the living room.

Last December, Netflix CEO Reed Hastings told the Official PlayStation Blog that there were even times when PlayStation 3 "surpassed the PC in hours of Netflix enjoyment to become our number one platform overall."

This is not an isolated case. Game consoles have dominated online video for several years -- in the living room, at least.

In March 2012, the Los Angeles Times reported that Microsoft's (NASDAQ: MSFT ) game console, Xbox 360, was used more for online entertainment (such as Netflix and HBO Go) than for online gaming.

Thus, if Amazon expects to break any new ground with its set-top box, it is going to need an additional hook, whether it's apps, a fresh service or some other gimmick.

Intel is already hard at work on a new TV service, one that it hopes will bridge the gap between cable TV and online video services.

It is not yet known if Apple is building a similar service, but some analysts -- including Piper Jaffray's Gene Munster -- believe that the Mac maker will offer an a la carte cable service when it releases its first television.

If Amazon beats them to the punch (or arrives around the same time), it could make it more difficult for Intel's service to gain traction, all the while posing a threat to whatever Apple might have planned.

Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ

(c) 2013 Benzinga does not provide investment advice. All rights reserved.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: AAPL , AMZN , INTC , MSFT , NFLX


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