4C - leaderboard - 4-25-18
  • Amazon Pushes Into Smart TVs With Rival Best Buy as Unlikely Partner

    Amazon is making a major push into smart TVs, with rival Best Buy as an unlikely partner. The companies announced that Best Buy will introduce more than ten 4K and HD “Fire TV Edition” TVs from Toshiba this summer and in-house brand Insignia later this year. Best Buy has had a deal with Roku for its Insignia line, which will now end. Amazon has had a Fire TV Edition model with Element that is being discontinued.

    The new Fire TV Edition TVs will be sold exclusively in Best Buy physical stores, on BestBuy.com and from Best Buy as a third-party seller on Amazon.

    The exclusive partnership is a bit surprising, but the press release notes Best Buy’s “unique role” and “customer-focused curation of the technology it sells online and in stores; in-store demonstrations offering hands-on experiences for customers; needs-based selling expertise designed to solve problems and address lifestyle needs; and, services that support customers in installing, setting up and operating their technology.” Underscoring the importance of the new partnership, both Amazon’s CEO Jeff Bezos and Best Buy’s CEO Hubert Joly are quoted in the release.

    For Best Buy, which has long sold Amazon’s electronics, the partnership is a validation that physical presence and support still matter, even as Amazon continues upending the retail landscape. Still, given how easy it is to set up Fire TV, it seems unusual that Amazon felt the need to have the Best Buy partnership, rather than just launching solo. As a point of reference, I recently bought an Insignia Roku TV from BestBuy.com and found the set-up to be a snap, with zero support of intervention needed by Best Buy. If Amazon can achieve the same ease of use for its Fire TV Edition TVs, it would seem like Best Buy’s role might not end up being that significant.

    Amazon’s smart TV initiative is yet another sign of the company’s aspirations for whole home dominance. With integrated Alexa and voice control, Fire TV Edition TVs could become a key element of managing other household functions and more. In the short term, the Fire TV Edition line creates a new competitor to Roku, whose Roku TVs have gained 20% share of the smart TV category, as well as Samsung, LG and other big smart TV players. Fire TV Edition also raises the stakes for Google and Apple, which also have smart speakers and whole home aspirations, but no TV sets.

    At a higher level, the Fire TV Edition certainly means many more homes will have a TV connected to the Internet that can run a wide variety of apps including skinny bundles. This puts even more pressure on the traditional pay-TV world and its expensive, under-powered set-top boxes, which in turn will accelerate cord-cutting. Fire TV Edition TVs also raises the likelihood that Amazon itself will launch a skinny bundle, as I have written is inevitable. Amazon’s presence in the living room and throughout the housed is surely going to grow.

     
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