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Amazon Web-TV Won't Kill Roku, Apple TV

Stocks in this article: AMZNAAPLWMTGOOG

NEW YORK (TheStreet) -- Could Amazon (AMZN) release a set-top box that turns the streaming world upside down?

Peter Kafka of re/code is reporting for the second time in the past year that Amazon could release its own set top box this March. Does this mean bad news for Apple's (AAPL) Apple TV and Roku? Not likely.

The two competing set-top boxes may be neck and neck with each other, but both are miles ahead of their competition. Apple Insider reported in December that Apple TV and Roku currently control 80% of the market for set-top boxes. This is in the face of competition from Netgear, Sony, Samsung, Western Digital and even Google.

An Amazon set-top box, if packaged well, could be a compelling product. However, Roku and Apple TV have a compelling case for permanence. Here's why both products are in a position of great strength, at the moment: 
 
Roku

Roku has been on a major roll over the last 12 months. Multiple tech hubs including CNET have called the Roku 3 the best streaming box on the market, even surpassing Apple TV. In December, the company added YouTube to its flagship product and March bore witness to the release of a revamped streaming stick that is compatible with any HDTV with an HDMI port. The $49.99 dongle will ship in April packed with more than 1,000 available channels, including YouTube, and live sports streaming with the NBA, NHL.

The company is becoming a household name due to years of innovation, its ease of use and expansive channel store, which features every popular (non Apple) streaming service on the market including Netflix, Hulu Plus and Amazon's own instant video service. Finally, with an eye to the future, Roku has set up partnerships to put its interface on smart TV's. The first two were announced at the Consumer Electronics show this January. 

Roku is not a company that looks as if it is slowing down. In fact, it appears it has only just begun to fly.

Apple TV

According to multiple reports, Apple TV posted 1 billion dollars in earnings in 2013. The number is based on both sales of the units and the revenue produced from sales of movies, music and television shows via the iTunes store. Tim Cook has finally stopped referring to Apple TV as a hobby as the company seems to be focusing on new content apps based both on Apple centric and third-party developers.

 

Though it does not have an app store, the set-top box has solid partnerships with ESPN, Hulu Plus, HBO-Go, YouTube, Disney and many others. Its AirPlay features have yet to be matched by Roku or any other device on the market.

Up-Hill Climb for Amazon

Amazon is one of the world's biggest online retailers, so if it releases a streaming box, it will certainly take the market by storm right?

Wal-Mart (WMT) is the largest retailer in the U.S. The company released its own set-top box in 2007, the Vudu player. These days, Vudu is a Roku channel as well as the IOS app. If the rumored Amazon box utilizes the same forked version of Android that the Kindle Fire currently employs, that could spell trouble for Amazon, as Android has proven to be a poor interface when used in a set-top box format.

Roku survived without YouTube for years, but Amazon has another problem. No set-top box built around Android or Google TV has managed to make a major impact on the market. This includes entries by Logitech, Netgear and Samsung.

Amazon's interface does not currently have a categorized app store of any kind. This means that customers have to search for each app by name. To make matters worse, there is no official YouTube app to be found for the Kindle Fire. Will this limitation be extended to a set-top box?

The tech industry is littered with vanquished Android powered "Roku and Apple TV Killers." Can Amazon offer anything to make it more compelling than the reigning powers? An even better question may be, will Amazon even release a product this March?

At the time of publication, Downey had no positions in securities mentioned.



This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

 

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