Wall Street not impressed with Amazon’s Fire TV

Wall Street isn’t convinced that Amazon’s latest gizmo will catch fire with consumers.

The world’s largest online retailer pulled out all the stops on Wednesday for the launch of its long-rumored Fire TV, a sleek, black box that streams shows, movies and video games via the Internet.

Amazon execs boasted at an event in Manhattan that the new device crushes rival offerings, including Roku, Apple TV and Google’s Chromecast, with its speed and ease of use.

Nevertheless, analysts and investors wondered whether Amazon boss Jeff Bezos was too late to the party with yet another streaming device.

At $99 a pop, Fire TV is similar to Apple TV in price and functionality. And aside from its own Amazon Prime instant video library, the new set-top box offers most of the same content services, including Netflix and Hulu Plus.
“It’s a me-too device,” said Michael Pachter, an analyst at Wedbush. “I know it does a lot of cool things that other devices don’t, but this is a crowded market.”

Pachter said the Seattle-based company should have offered its Prime instant video service for free for six months to entice consumers to favor the gadget over its rivals’ offerings.

The niftiest feature is a voice-activated remote control, which Bezos promised would take the pain out of “scrolling and clicking one letter at a time on an alphabet grid.”

Amazon execs also bragged that Fire TV loads content three times faster than the competition, thanks to its quad-core processor.

“The product solves a bunch of problems we didn’t know we had,” Pachter said, referring to its speed and voice-activation remote.

There is also a new feature, called ASAP, that cuts down on loading time by predicting what movies and TV episodes users will likely want to watch.

Kindle executive Peter Larsen said consumer complaints about slow speeds and poor search capabilities spurred the company’s decision to roll out its own device.

Analysts countered that Fire TV is better seen as a Trojan horse that will lure users into becoming Amazon Prime customers.

The company’s video service is bundled with Prime membership, which includes two-day shipping and costs $99 a year.

Amazon also will likely add more features to the set-top box to get customers to make more purchases from their living room, analysts said.

Fire TV isn’t expected to be a money maker on its own because it’s likely being sold at close to cost, they added.

“This is an intermediate- to long-term strategic move, which is not likely to have a near-term impact on Amazon’s financials,” said Youssef Squali, an analyst at Cantor Fitzgerald.

In extended trading on Wednesday, Amazon stock fell 1.2 percent, to $340.75.