Analyst: Amazon’s Fire TV Presents No Challenge to Apple TV

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On Wednesday, Amazon (NASDAQ:AMZN) unveiled Fire TV, its long-awaited entry into the video-streaming hardware market. The set-top device will ostensibly compete for customers against the Apple (NASDAQ:AAPL) TV, Google’s (NASDAQ:GOOG) Chromecast, and Roku’s various media-streaming devices.

Like the devices offered by its rivals, Amazon’s Fire TV allows users to stream Internet-based media to their televisions. However, Amazon attempted to set its device apart by including a voice-activated search feature and the capability to stream video games. Although Apple TV doesn’t currently include those features, at least one analyst believes that the Cupertino-based company has nothing to worry about. Amazon Fire TV “is kind of a run-of-the-mill, undifferentiated offering compared to those other guys,” Forrester analyst Jim Nail recently told MarketWatch. “Technology stuff has nothing to do with it.”

According to Nail, the only reason a customer would pick Amazon Fire TV over Apple TV, Chromecast, or Roku was if the customer was already using Amazon’s services, like Prime Instant Video. “What Amazon has that certainly Roku and even Google don’t have are the customer relationships and the credit-card numbers of those tens of millions of people who shop with them already,” Nail told MarketWatch. However, Apple has a similar advantage through its millions of iTunes accountholders.

Customers looking for a low-cost alternative can also get cheaper devices from Google or Roku. Google’s Chromecast retails for around $35, while the Roku 1 costs $50. Amazon Fire TV also failed to match Roku’s content, according to Nail. “It’s a very bland, vanilla device with — at least at this point — a very thin selection of content,” the Forrester analyst told NBC News.

Amazon Fire TV’s limited amount of content may be due to traditional television networks’ reluctance to allow their content to be distributed through an Internet-based device. “What none of these players have cracked is the ability to attract television networks,” Nail told NBC News. “The networks very jealously hold onto their content. Prime-time TV and live sports is still the bulk of what people spend their free time watching.”

For this reason, Nail believes that Amazon Fire TV will not significantly alter the current media-streaming device market beyond giving customers yet another hardware option. “[T]here’s nothing compelling to pick this box over those other boxes,” Nail told MarketWatch.

However, the analyst noted that it made sense for Amazon to debut a video-streaming device, since the market is still in its infancy. According to Forrester data cited by Nail, only 8 percent of the U.S. television market is made up of Internet-enabled TV set-top boxes. Despite the low penetration numbers, Apple CEO Tim Cook recently revealed that the company made over $1 billion in revenue from Apple TV sales and Apple TV content sales in fiscal 2013.

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