Amazon.com, Inc. (NASDAQ:AMZN) is now planning to come up with a set top box for video streaming, reports Bloomberg Businessweek. The planned video streaming device from the online retailer will push Amazon’s streaming services and will be direct competition to Apple Inc. (NASDAQ:AAPL)’s TV, or the Roku box and the Boxee Cloud DVR.
Foray into the television set-top box is a logical step for Amazon.com, Inc. (NASDAQ:AMZN). The company already makes e-readers and tablets, and will soon come up with a smartphone, so it has the infrastructure to produce a TV set-top box.
The new hardware from the kindle maker will help push Amazon.com, Inc. (NASDAQ:AMZN)’s video, and potentially apps. The users will be able to enjoy offerings like à la carte Video on Demand store, which includes newer films and TV shows, also Instant Video service, which is available free for subscribers to the Amazon Prime two-day shipping package.
Amazon, which has been producing hardware since the launch of Kindle in 2007, makes most of its revenues from digital media and apps, and little from hardware, much in contrast to the iPhone maker, which earns a major portion of its revenues from hardware and a little bit on digital media and apps.
The streaming service from Amazon is inbuilt in most of the new TV’s and is also available in Roku boxes. Apple Inc. (NASDAQ:AAPL) TV does not support Amazon video, but the video service will be welcomed if Apple Inc. (NASDAQ:AAPL) opens up Apple TV to apps.
The e-commerce giant has been expanding rapidly in the video segment. The online retailer, earlier this week, launched 14 televisions pilots financed by it, and is currently in the process of finalizing the selected series based on the viewer’s feedback.
What will be interesting to see is whether or not Amazon.com, Inc. (NASDAQ:AMZN) will allow the rival video streaming services, like Netflix, Inc. (NASDAQ:NFLX), Hulu, and Google Inc (NASDAQ:GOOG)’s YouTube, onto its device. Presently, Kindle Fire users have access to these apps from rivals.
Netflix, Inc. (NASDAQ:NFLX), which will post its earnings on Monday, is expected to report strong video-streaming subscriber growth. On April 11, the company’s CEO Reed Hastings told in a post on Facebook Inc (NASDAQ:FB), that the company’s subscribers had watched more than 4 billion hours of Netflix programming over the prior three months.
The set-top box from Amazon is being developed by Amazon.com, Inc. (NASDAQ:AMZN)’s Lab126 division in Cupertino, Calif and is headed by Malachy Moynihan, a former vice president of emerging video products at Cisco Systems, Inc. (NASDAQ:CSCO). Moynihan has also worked at Apple Inc. (NASDAQ:AAPL) during the 1980’s and 1990’s. Other hardware engineers responsible for Amazon’s set-top box are Goodman, formerly a top engineer at TiVo Inc. (NASDAQ:TIVO) and Vudu (WMT), and Chris Coley, a former hardware architect at ReplayTV.
