Are the Nifty Features of Amazon's Set-Top Box Worth $99?

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Amazon Said Set to Debut TV-Viewing Device to Reach Living Rooms
Jin Lee/Bloomberg/Getty ImagesAmazon executive Peter Larson with the Fire TV.
The Fire TV from Amazon.com (AMZN) raises the bar for set-top devices in new and unusual ways. Wednesday's debut came with plenty of positive surprises -- and a negative, the price.

Amazon has historically priced its products at the low end of the spectrum, something that it learned quickly after introducing the Kindle e-reader at $399 in 2007 before getting aggressive with price cuts. Fire TV hit the market at $99, and while that may seem reasonable compared to what streaming devices were fetching just a few years ago, it's nowhere close to being one of the cheaper Web-savvy boxes for video buffs.

Google's (GOOG) Chromecast turned heads at $35 last year, and entry-level Roku players can be had for less than $50. Apple (AAPL) is at the high end of the range at $99, but even Amazon.com itself is selling them for less than $93 these days.

Apple, Roku, and Google have each reportedly sold millions of their devices that use Wi-Fi connectivity to stream Internet videos on TV screens. Can Amazon make a difference as the most expensive option in a crowded playing field?

It's an Everything Box
  • Fire TV allows owners to search for the content or actors that they want to watch by saying it out loud, and they don't have to shout across the room to their Xbox Kinect box. They can whisper into the actual remote. Amazon's demo was pretty impressive on that front, but we'll have to wait to see how it performs in the wild.
  • Fire TV does away with the annoying spinning icon that comes up on other media players as videos load. Amazon claims that shows load quicker through Fire TV, eliminating the initial buffering that many associate with streaming. Amazon appears to be able to do this because it's using a more powerful quad-core processor than existing media players. It also packs 2 gigabytes of memory, four times what the entry-level Roku, Apple TV and Chromecast offer. In other words, it can start loading a program just as one is hovering over it in case it's ultimately selected.
  • Fire TV streams music apps, and users can send photos to Amazon's cloud service to view as a slideshow on their TV when Fire TV is idle.
  • Fire TV plays hundreds of free or nearly free Android video games -- with thousands on the way. Amazon is also selling a $39 controller accessory for diehard gamers who want a more traditional experience.
Naturally Fire TV plays nice with the Prime Instant Video platform that offers Amazon Prime customers access to 40,000 movies and TV show episodes at no additional cost beyond the $99 a year that they pay for expedited shipping and other perks. However, it also streams all of the major video services. HBO Go is the lone platform that isn't available, but Amazon insists that it's coming -- but probably not in time for the fourth season debut of "Game of Thrones."

There may be some resistance at first to Amazon's surprisingly high price. Some had speculated that Amazon would even give it away to Amazon Prime members to achieve mass penetration at launch, but clearly that didn't happen.

However, as the market begins to absorb what Fire TV does and what it's capable of, it seems as if Amazon's strategy -- to wait until it had a product that truly changed the game -- will pay off nicely.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple, and Google. The Motley Fool owns shares of Amazon.com, Apple, and Google. Try any of our newsletter services free for 30 days.

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Saraah Wilson

Amazon has priced its new product the “Fire TV” at $90, which is the same as the price of an Apple TV, and significantly higher than Chromecast’s price of $35 http://goo.gl/ik8jUi

April 04 2014 at 8:01 PM Report abuse rate up rate down Reply