Online megastore Amazon (NASDAQ:AMZN) wants to pull a Google (NASDAQ:GOOG) and become ingrained in multiple aspects of our daily lives. The company has discussed Sunday deliveries, drop-off lockers, and even drone deliveries. The company's two newest projects garnering interest include a television box to compete with Google, Roku, and Apple (NASDAQ:AAPL) and a test run of a grocery delivery service. Will these projects help grow Amazon's loyal consumer base?
Amazon truly excels at cross-promoting services to users. That's why the company sells the Kindle Fire tablets at a loss, to promote sales of its digital products. That process is about to take a step further with the Fire TV streaming box. It's a lucrative market to enter, as Apple TV brought in more than $1 billion in sales last year, but it's also a saturated one.
Does Amazon's Fire TV stand a chance against the competition? How does the box relate to the company's grocery delivery service?
Fire TV heats up
Streaming television boxes have become the rage in recent years, with the market including Roku, Apple TV, and Google's Chromecast. How does Amazon's Fire TV differ from the other offerings?
Fire TV has the least in common with Apple TV and Chromecast. The latter isn't technically a "box" since it's only available as a stick that plugs into an HDTV and is then operated wirelessly with either a mobile device or computer. Many users will find using, say, a smartphone as a remote a tad annoying. However, Chromecast is the cheapest at $35 compared to $99 for the boxes.
Apple TV has more in common with the Fire TV. Both boxes can operate with a remote or with a mobile app. The number of third-party apps is comparable though the details differ. Fire TV, for example, includes Showtime Anywhere whereas Apple TV has HBO Go. The standout difference is that the Fire TV supports gameplay with an optional gaming controller and the company's extensive games market available for purchases.
Amazon's most direct competition comes from Roku, which offers a range of devices starting at a $49 stick and ending with a $99 box similar to the Fire TV. A selling point for the Fire TV is the decent number of third-party apps that it offers straight out of the gate, with the likes of Netflix and Hulu Plus appearing alongside Amazon's own Instant Video library. Roku has had more time to sign up partners over the years, though, and its third-party apps currently dwarf the Fire TV's. Roku also offers users the ability to play games.
Fire TV could win with loyal Amazon shoppers, particularly those accustomed to the Kindle Fire interface and using the cloud for storage. The box could end up catching up to Roku quickly if the Fire TV proves that it can sell. Amazon's box stands alone in offering voice controls, but it's doubtful that will serve as the deciding factor for most customers.
Dash device for groceries
Dash looks like a high-tech pregnancy test, but it's actually a handy way for customers to scan barcodes to put on a shopping list for AmazonFresh, the company's grocery delivery service. Customers can scan packages or simply speak the product's name and then check the list and order on a computer or mobile device. Dash doesn't cost anything, but it is also currently invitation only.
The basic setup could prove incredibly handy in the future. AmazonFresh only delivers to Southern California, San Francisco, and Seattle at this time, though. Amazon will likely roll out the service to more cities in the future, but people in the rural Midwest might remain firmly out of luck.
How would AmazonFresh benefit those in metro areas where grocery delivery services such as Peapod already exist? Fresh offers free same-day deliveries on orders over $50 and will pick up goods from a variety of area stores without an extra charge. Customers can also choose from a wide selection of Amazon.com products that can deliver with the order.
Dash could prove Amazon's main advantage if the device -and AmazonFresh- receive wider rollouts.
Foolish final thoughts
So how do Dash and AmazonFresh relate to the Fire TV? The projects all exemplify Amazon's cross-branding. Dash encourages people to use Fresh, which also allows the purchase of online merchandise. Fire TV's structure encourages the use of Amazon's own app store. This strategy means that Amazon can afford to take some losses, such as the sale price of the Kindle Fire tablets, in order to pick up business in another area.