Amazon may introduce a Kindle TV accessory

April 25, 2013

Amazon may be making a major new play for the living room, according to reports that the e-commerce giant is developing a “Kindle TV” set-top box to compete with AppleTV and Roku.

The way we watch television is changing, fast, and Amazon is looking to jump into the fray with its own device that brings its streaming video content to users’ televisions, Bloomberg reported Wednesday. The device could be introduced this fall, the report said.

Amazon already offers free streaming video as a part of its $79 annual Amazon Prime service. Amazon says that the service has more than 36,000 free movies and TV episodes available for its customers. Overall, there are about 150,000 titles available to rent or buy.

Some Prime customers can already watch Amazon content on their televisions, through Internet hookups or hookups with Microsoft’s Xbox, Nintendo’s Wii U , Sony’s PlayStation 3, as well as through set-top boxes such as the Roku or on some smart televisions.

According to the Bloomberg report, which cites “three people familiar with the project,” the box is being developed by the company’s Lab126 division and is being led by former Apple, TiVO and Vudu employees.

Amazon spokesman Kinley Pearsall declined to comment on the rumors.

Buzz around the rumored Kindle TV box comes ahead of the company’s Thursday earnings report. Analysts expect Amazon to report earnings of around 7 cents per share on $16.1 billion in revenue, according to a survey from Thomson.

The tech giant has seen good success with its past forays into hardware — the Kindle and Kindle Fire tablet. The company’s strategy with the Kindle line has been to offer the devices at very low prices and make money from consumers’ content purchases in the long term. Last month, the company dropped the price of its most expensive tablets, the WiFi and 4G versions of its 8.9-inch Kindle Fire, explaining that the cost of making the tablets had fallen as the company has produced more devices.

“Across our business at Amazon, whenever we are able to create cost efficiencies like this, we want to pass the savings along to our customers,” said Amazon’s Kindle vice president, Dave Limp, in a release.

As of the end of 2012, the IDC analysis firm reported that Amazon trailed Apple and Samsung in tablet market share, with 11.5 percent of the world market. That was a drop from the previous year, when the company had 15.9 percent of the market, which analysts say may have also influenced the decision to drop the top Kindle prices.

According to a report from the New York Times, analysts expect that the company will stick to this same strategy for a set-top box.

The report noted, however, that Amazon would be late to the game. The firm moved into the e-reader and tablet markets when they were relatively fluid. But the market for streaming video is a little more competitive, with dedicated devices like Roku and Apple TV, and stronger pushes from console makers to put more streaming video onto the devices consumers already have plugged into their televisions..

One way for Amazon to distinguish itself is by offering original programming, a new focus for the firm. The company launched its first original pilot season with more than a dozen shows on Friday. On Monday, the company reported that the new shows accounted for eight of its 10 most-watched titles over the weekend.

Related stories:

AP: Amazon hopes its original TV shows, debuting soon, convince more to become Prime members

Microsoft: Xbox event planned for May 21

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Hayley Tsukayama covers consumer technology for The Washington Post.
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