Brett Sappington, Director, Research
It seems that several companies are eager to throw their hat into the video streaming set-top box ring lately. News of Amazon's entry follows closely on the heels of Intel's high profile disclosures about its entry into this area. Interestingly, all of this attention is about a market space that has seen, at best, limited success among the offerings made to date. Google TV, offered via partner boxes, was not commercially successful. Apple TV has had limited adoption but is far less popular among consumers than other Apple products. Roku is one of the more successful players, with over 5 million boxes in the market today.
So, why would companies like Intel and Amazon jump into a market that has only seen limited traction among consumers even while online streaming services are booming? One reason may be market timing. Industry watchers have suggested that Apple will launch a new TV-based product in the near term, and many have speculated about the possible product features that Apple might include. Microsoft and Sony are set to release new game consoles at the end of the year that should build upon the growth of these devices as entertainment hubs. At the same time, smart TV adoption has increased steadily, and more consumers are becoming comfortable with the streaming potential and interactive interfaces of these devices.
Intel and Amazon (and other potential players) may want to stake their own claim in this emerging area before others do so. However, pricing, business models, and differentiating features are still up in the air as everyone tries to guess which combination will ultimately capture the consumer (such as the iPad did for the tablet industry). So, while several websites will likely include these devices among their "Top 10 Must Have Devices for Christmas 2013", it will be interesting to see if consumers agree.
