Amazon Preps Kindle TV Set-Top Box

Streaming device to join an already crowded market

After expanding into hardware creation with the Kindle, the Kindle Fire tablet and a rumored smart phone, Amazon is developing a proprietary TV set-top box. 

According to unnamed sources cited by Bloomberg Businessweek, Amazon this fall plans to introduce a device that will stream video over the Internet directly onto users’ TV sets, similar to ones made by Apple, Google, Roku and Boxee. The new set-top will sync with Amazon’s Instant Video service, which is already available via the aforementioned devices.

Given the success of DVRs, the TV set-top box market is already pretty claustrophobic. Launched in 1997, Granddaddy TiVo boasts around 3 million subs, although the vast majority of the 53 million deployed DVRs are generic cable boxes pumped out by the likes of Scientific Atlanta and Motorola.

Despite the dominance of vanilla DVR, it’s the up-and-comers that have consumers licking their chops. Apple sold 5 million Apple TVs last year, while Google has a wide range of hardware partnerships for Google TV. Since launching the platform in 2005, Microsoft has shifted 77.2 million Xbox 360 units, while Sony does brisk business with its PlayStation 3. (Both consoles are expected to release next-generation versions later this year.)

One reason Amazon is considering getting into the hardware business is that a set-top would likely help expand the subscriber base for Amazon Instant Video. The company recently expanded its robust streaming business to content creation, releasing 14 original pilots to the Amazon Instant website. With its new box, Amazon may be looking to replicate its Kindle business model—keep hardware prices low to expand the market for its massive library of content.