Here's what two other analyst had to say about Amazon's Fire TV.
Justin Post, Bank of America Merrill Lynch (Buy; $435 PT)
Fire TV is a push by Amazon to gain a better foothold in the living room where a large portion of media consumption occurs. We would expect Amazon to sell the Fire TV at close to break-even (similar to its Kindle and Kindle Fire strategy) with the goal of driving media sales and Prime customer acquisition (30 day free trial of Prime included with Fire TV purchase). While the device seems late to market vs. Apple TV (over 13mn units sold) and early adopters of competitive devices may not switch, Prime members (potentially 20mn in US) may be tempted to buy Fire TV as we like the competitive features. Features include: 1) ability to access video content from Netflix, Amazon, Hulu, YouTube, etc; 2) ability to access music from Amazon, Pandora, etc. 3) 3x processing power and 4x memory of competitive devices (according to Amazon); 4) voice search/navigation; 5) integrated gaming platform; and 6) Freetime Unlimited, a subscription service with kids content for Prime and non-Prime customers.
Ronald Josey, JMP Securities (Market Perform, N/A PT)
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We believe Fire TV, currently available for $99, completes the Amazon Kindle ecosystem and expands the company's reach across all four screens (smartphone, tablet, TV, and desktop). Similar to Amazon's approach with its Kindle eReaders and Fire tablets, we believe Amazon is selling Fire TV at minimal (if any) margin and that monetization will be from incremental digital media consumption across Amazon's media ecosystem. While it is still early in the overall penetration of streaming devices relative to the [approximately] 300M installed TVs domestically, as of yesterday afternoon Fire TV now ranks as the top selling Electronics device on Amazon with Chromecast ranked second; we note that the Roku Streaming Stick, Roku 3, and Apple TV all rank in the top 10 electronic products sold on Amazon. Fire TV includes a month of Prime and as adoption rises, we expect Amazon's media revenue to benefit. While we are positive on the potential of Fire TV and on streaming media devices in general, we remain on the sidelines on Amazon shares until we have more confidence that Paid Units growth stabilizes, that digital media adoption ramps internationally, and in improving international EGM trends.
--Written by Laurie Kulikowski in New York.