Amazon Plans to Challenge Apple TV With Own Set-Top Box

Amazon Big Smile

Apple (NASDAQ:AAPL) may soon be facing additional competition in the burgeoning digital media player market. According to insider sources cited by Re/Code, Amazon (NASDAQ:AMZN) is preparing to launch its own device for delivering Internet video to television. Amazon’s as-yet-unnamed Web TV box would offer services similar to Apple TV and devices sold by Roku.

Per Re/Code’s sources, Amazon is planning on launching the device in March, around the same time that Apple’s next-generation Apple TV device is rumored to be released, based on the timeline of previous upgrades. Amazon’s move into the digital media player hardware market follows the company’s similar moves into the e-book reader and tablet markets after it began offering media for those devices. Amazon has long offered streaming Internet video content through its Amazon Instant Video service, and its upcoming Web TV box would be a natural complement to this service.

As noted by Recode, Amazon’s entry into the digital media player market is not surprising, especially considering that the company previously announced a Web TV box last year before putting the plans on hold for unknown reasons. Amazon’s upcoming device will use an offshoot of Google’s (NASDAQ:GOOG) Android operating system similar to how the company used a version of the operating system for its Kindle Fire tablets, according to Re/Code’s sources.

Besides competing with Apple TV’s Internet video streaming capabilities, Amazon’s set-top box may also challenge the Cupertino, California-based company in the video game arena. According to job listings spotted by Re/Code, Amazon has been seeking game developers with “experience designing and creating world-class games.” This has led to speculation that Amazon’s upcoming Web TV box may also include the ability to play video games.

The next-generation Apple TV is also rumored to feature game support. Apple news site iLounge previously cited “reliable industry sources” that reported that the new Apple TV would have a function that will allow users to directly download games to the digital media receiver. The sources also suggested that Bluetooth-enabled controllers were in development.

Apple’s acquisition of motion-sensing technology company PrimeSense in November has only added fuel to the rumors. PrimeSense’s 3-D vision and gesture technology is used in Microsoft’s (NASDAQ:MSFT) Xbox 360 Kinect system and allows the device to distinguishes users with its face-recognition capabilities, as well as interpret their gestures. This technology could be similarly implemented into the upcoming Apple TV.

Like Apple TV and Roku, Amazon’s Web TV box will likely include apps that will allow other content providers to stream content through the device. It should be noted that Apple TV currently does not allow users to directly stream Amazon’s video service. However, users can display content not available through included apps by using AirPlay to stream content from their iOS devices.

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