Amazon unveils Fire TV streaming device

Amazon unveils Fire TV streaming device

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Amazon Fire TV (photo courtesy of Amazon Inc.) Amazon Fire TV (photo courtesy of Amazon Inc.)

By MAE ANDERSON | AP Retail Writer

NEW YORK (AP) — Amazon is making a bid to enter living rooms with Amazon Fire TV, a new streaming device that delivers online video, music and other content to televisions.

The company says the $99 device has better speed, performance and search functions than other streaming boxes such as Apple TV and Google Chromecast. But Amazon is coming late to the streaming device game, and it remains to be seen whether the company is offering enough new and better services to lure customers away from their current streaming methods.

Amazon created buzz about the device last week when it sent an invitation to the media hinting about an update to its video service. It debuted the box at Milk Studios in New York to about 200 media members, offering movie snacks like popcorn and Milk Duds.

The device, about the size of a CD case, runs Google's Android operating system and offers Netflix, Hulu and other streaming channels in addition to Amazon Prime instant video. It comes with a Bluetooth remote, which lets users search for video by talking to the remote. Customers will get a free 30-day trial subscription to Netflix and Amazon Prime when they buy a Fire TV.

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.

Fire TV also offers a range of other services, including channels like YouTube and Pandora and "Free Time," a customizable interface for children.

The box, which starts shipping today, will also feature 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.

One analyst called the offering "underwhelming," however.

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. Amazon Fire TV will be sold on Amazon's site, Best Buy, Staples and other retailers coming soon.

Amazon shares fell $1.03 to $341.96 in Tuesday's trading. The stock is down 14 percent since the beginning of the year.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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