Amazon's Apple TV Killer Could Go on Sale This Month

Amazon is about to go head-to-head with Apple and Microsoft.

Mar 5, 2014 at 11:00AM (NASDAQ:AMZN) is reportedly planning to debut a set-top box later this month, according to Re/code. The device will likely compete with Apple's (NASDAQ:AAPL) own Apple TV, but could also put pressure on traditional video game consoles, including Microsoft's (NASDAQ:MSFT) Xbox One.

Assuming it's priced aggressively, Amazon's new box should help the company expand its growing digital business and put pressure on its rivals.

Amazon needs a set-top box
Amazon's move into hardware, including its long-rumored set-top box, is somewhat of a defensive play: Without offering its own hardware, it's possible that Amazon could eventually be forced out of the digital goods space.

Amazon, for example, rents and sells digital copies of movies through its Amazon Instant Video service. While this service is accessible on a number of Internet-connected set-top boxes, including Roku's various streaming devices and Microsoft's Xbox video game console, it can't be accessed through Apple TV.

Amazon Instant Video competes directly with Apple's own iTunes video service, making it unlikely that Apple would add Amazon's service to its set-top box anytime soon. The same was once true for Google's competing Chromecast, although last month, Google opened up the device to third-party apps.

Still, as both Apple and Google are expected to push further into the Internet-connected TV space, Amazon needs its own device to stay relevant.

One killer feature that could put Amazon's box ahead of the pack
But with a flurry of boxes already on the market, and more expected to arrive in the coming months, Amazon's device could get lost in the shuffle. Like its Kindle Fire tablets, Amazon will likely attempt to compete by undercutting its competitors, but it could also offer something far more substantial.

Last year, Game Informer reported that Amazon was working on a video game console, one that could double as a set-top box. Then last month, TechCrunch reported that Amazon had acquired Double Helix games, the video game studio that developed Killer Instinct for Microsoft's Xbox One.

It seems likely that Amazon's forthcoming device will double as a video game console, offering owners the ability to play games and stream Internet video. Apple TV (at least for now) isn't capable of playing video games; Microsoft's Xbox One plays games and streams video, but retails for $500 -- likely much more than what Amazon will charge for its forthcoming box.

The ecosystem enters the living room
Fueled by the growing number of iOS devices, Apple's iTunes revenue has ballooned to enormous proportions in recent months, and now grosses roughly $7 billion per quarter -- a combination of music, movies, and app sales have given Apple a rapidly growing digital goods business.

Amazon's move into the living room should prevent it from being shut out of the market entirely, and might allow it to steal some revenue from Apple, particularly as the iPhone maker continues to emphasize its TV business. It could also put pressure on video game consoles, including Microsoft's Xbox.

It remains to be seen what Amazon will unveil, but investors should view Amazon's push into the living room as a positive, and expect something much more substantial than just a Roku or Apple TV clone.

A better investment than Amazon?
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Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends and owns shares of, Apple, and Google. It also owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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