Last updated: April 2, 2014 8:17 pm

Amazon joins screen battle with Fire TV video streaming device

Peter Larsen, vice president of Amazon Inc., introduces Amazon FireTV during a news conference in New York, U.S., on Wednesday, April 2, 2014. The world’s largest Internet retailer unveiled FireTV, a television-viewing device for streaming movies, television shows and other video from the Web. Photographer: Jin Lee/Bloomberg *** Local Caption *** Peter Larsen©Bloomberg

Amazon is joining a battle with rival tech giants over the future of television by launching a new video streaming device that will compete with products from Apple, Google and others.

The online retailer on Wednesday unveiled Fire TV, a palm-sized box that plugs into your television, which will sell for $99.

The price tag matches Apple’s TV set-top box, which is expected to receive an overhaul in the coming weeks. It positions Fire TV at the high end of the market, leaving more basic TV streaming devices from Roku and Google’s Chromecast at a significant cost advantage.

Just as the Kindle ereader acts as a portal to Amazon’s book catalogue, the set-top box will provide instant access to its film and television programming, which Amazon Prime customers are already able to stream free of charge.

Customers will be able to watch Amazon’s original content, as well as content from providers such as YouTube, Netflix and Hulu, and television channels including Showtime, ESPN and Disney. Amazon is in also talks with HBO for movie streaming.

The launch underlines Amazon’s ambition to replicate in the digital arena its dominance of physical goods sold online. It leads the ebook market but it lags behind rivals in digital video and music.

But analysts say it faces an uphill struggle in winning market share from existing services. Apple TV leads the market for non-traditional television devices, followed by Roku and Chromecast, according to Strategy Analytics.

Peter Larsen, vice-president of Amazon’s Kindle business, told the Financial Times: “We wanted to pack [together] as much content and technology and hardware at the lowest price we can. We have been selling all of these existing video streaming devices on our site and have been able to learn what people like and don’t like.”

He said Fire TV would overcome complaints about rival devices, which include poor quality, frustrating navigation and conflicting payment systems.

Referring to Amazon’s Kindle ereaders and tablets, he added: “We have a history of inventing and simplifying on behalf of customers.” He said Fire TV had “three times the performance [as measured by processing power]” of Apple TV, Roku and Chromecast.

It will also be possible to play music and video games on the Amazon device. The company is creating its own games and will be supporting those by partners such as Electronic Arts. Users will be able to play via smartphones, tablets and a new gaming controller that Amazon also unveiled on Wednesday.

As the company enters another battle with Apple and Google, David Watkins, a director at Strategy Analytics, said: “Amazon’s move is essentially the final piece in a three-way battle between America’s internet heavyweights for tomorrow’s TV screen. It’s like Dr Pepper challenging the might of Coke and Pepsi.”

Fire TV’s features include voice-based search for content, Dolby digital surround sound and a Bluetooth remote control.

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Amazon already has an instant video service that offers some movies and television programmes on a pay-per-view basis, but the company has used it mainly as a free add-on for customers who subscribe to its Prime delivery plan.

In 2014, the number of digital video viewers is expected to reach 194.5m, or 77.3 per cent of US internet users, according to eMarketer.

“Amazon has invested more in this product than its rivals, because it had to,” said James McQuivey, analyst at Forrester. “It is a slightly faster Roku box combined with voice recognition to make search easier and then they have created a full Android gaming device. This puts the product into a whole class of its own.”

The company will eventually want to help you buy things in the living room, he added. “Wouldn’t it be great if you could pick up the voice-controlled remote and say ‘buy me that mascara’. The company already has the capability of knowing your preferences. This is the real future of TV for Amazon.”

Additional reporting by Tim Bradshaw in San Francisco

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