Amazon ups its hardware business with a smartphone and set-top box

Puneet Sikka - Author

Apr. 14 2014, Published 11:33 a.m. ET

Amazon plans to launch a new smartphone after it introduced a set-top box a few days back

In the last few days, Amazon (AMZN) announced the launch of a new set-top box named Kindle Fire TV and an upcoming smartphone. Amazon announced the launch of its Kindle Fire TV in a press release on April 2, while the company is preparing to launch its smartphone in the second half of the year as per a report from the Wall Street Journal on Friday, citing people briefed on the company’s plans. With the intention to launch these devices, Amazon is clearly trying to establish itself as a hardware player and compete with Apple (AAPL), Google (GOOG), and Samsung (SSNLF) in this market.

Amazon’s looking to expand its customer base

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Over the last year, Amazon’s stock has increased from $265 to $317, although its year-to-date performance hasn’t been good. The primary reason for stock’s decline over the last three months has been its slowing revenue growth. Amazon’s strategy to enter into other hardware products comes from its focus to revive its revenue growth. The company is the largest online retailer and it sells products ranging from general merchandise, books, and music to digital content. Amazon has a policy of offering hardware products for a lower price so as to acquire customers and then up-selling digital content and other products through its website. In the past, Amazon has introduced hardware products at lower prices, such as the Kindle e-book reader, the Kindle Fire Kindle Fire HD tablets, and now the Kindle Fire TV set-top box.

Amazon Fire TV offers videos, music, and games

Fire TV is primarily a video streaming product from Amazon, similar to what Apple offers with Apple TV. Through Fire TV, users can stream videos from Netflix (NFLX), YouTube, and Hulu. The device also comes with access to Amazon’s own Instant Video service and access to music service from Amazon MP3, Pandora (P), and TuneIn. Kindle Fire TV also has a voice search feature, comes with 2 GB of memory access, and streams in up to full-HD 1080p.


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