Amazon to Stop Selling Apple TV and Chromecast
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- October 1st, 2015
SEATTLE — Amazon said on Thursday that it would stop selling devices from Apple and Google that compete with its own streaming media players, escalating the entertainment battle between the major tech companies.
Apple TV and Google’s Chromecast are popular items in Amazon’s electronics store. But the devices are in a brawl for market share with Amazon’s Fire TV and Fire TV Stick, which were introduced in 2014. The Fire Stick delivers Amazon’s rapidly expanding video offerings to its customers. Apple TV and Chromecast do not.
Amazon’s move to ban competitors is not a retailing gambit. In fact, the company is willing to risk annoying customers who cannot get what they want because it is pursuing a much bigger prize. The stick is crucial to Amazon’s ambitions to move from being just a retailer to a multifaceted provider of everything virtual and physical.
“It’s unlike Amazon to be this territorial,” said James McQuivey, an analyst with the research firm Forrester. But he said it was a logical and perhaps inevitable move.
Amazon Prime, which began as a frequent shipping service, now has tens of millions of subscribers. In the effort to build out its ecosystem, Prime’s video and music components are becoming as important as quick package delivery.
Updates about Prime Music and Prime Video are frequent. Just as the news was breaking about Apple TV and Chromecast, Amazon announced on Thursday another Prime Video licensing deal, saying it would be the exclusive streaming subscription home for three new CBS series.
Mr. McQuivey said Amazon’s move echoed Apple TV’s refusal to play Netflix’s streaming service several years ago because Apple did not want to promote a competitor. Apple ultimately gave in.
Apple, Google and Amazon once made very different products. Apple made hardware like computers and smartphones, Google ran a web search behemoth, and Amazon was an online retailer. But the three companies’ business models are converging with a vengeance, with each offering a combination of hardware, like the competing video streaming devices, as well as software and entertainment like music and video.
“We’re seeing a turf war play out between Apple, Amazon and Google,” said Ben Bajarin, an analyst at Creative Strategies.
The companies have clashed in the past. In 2012, Apple pushed Google’s YouTube app off its lineup of built-in apps on iPhones and iPads, for example. That same year, Apple also featured its own maps app on the gadgets instead of using Google Maps.
As a store, Amazon likes to stress that it is a place “where people can find and discover virtually anything they want to buy online.” It does not want customers to go elsewhere. Last year, when the retailer clashed with the publisher Hachette and warned customers it was going to make it harder for them to buy Hachette books, it stressed that they were still available from third-party sellers on its site.
This time is different. Amazon is forbidding its vast army of third-party merchants from selling the Apple and Google devices after Oct. 29, according to messages from resellers posted in online forums and that Amazon did not dispute. Amazon’s ban of sales of the Apple and Google devices from third-party merchants was earlier reported by Bloomberg.
Amazon, which is never keen on explaining its actions, issued a cryptic statement that did not mention its two competitors.
“Over the last three years, Prime Video has become an important part of Prime,” Amazon said. “It’s important that the streaming media players we sell interact well with Prime Video in order to avoid customer confusion. Roku, Xbox, PlayStation and Fire TV are excellent choices.”
The Xbox is made by Microsoft and the PlayStation by Sony. Roku is more popular than Apple’s device and is about even with Google’s device.
Apple and Google declined to comment. On Amazon’s list of top-selling electronics products, Chromecast comes in at No. 6 and Apple TV is No. 14.
Amazon issued the ban just after Apple and Google unveiled new streaming media players. Apple showed an upgraded Apple TV last month, but analysts were generally unimpressed. Its ambition is to get into more living rooms with a multipurpose entertainment hub that lets app makers create content for the big screen. When the new Apple TV is released at the end of this month, users should be able to watch TV and play video games, as well as use apps to shop, book lodging and collaborate on art and design projects.
Google this week introduced a redesigned Chromecast along with a second device, Chromecast Audio, for streaming music to speakers. Chromecast has been a huge success in Google’s otherwise spotty record on hardware. Since unveiling the device in 2013, the company has sold some 20 million units.
Some analysts said there was one immediate loser here: customers.
“It really just hurts the consumers and creates confusion at a time when all of these companies are trying to build up these products,” said Paul Verna, media analyst at eMarketer.
But he said sales would not be affected. “I don’t think that in today’s world consumers are going to not buy one of these products just because Amazon isn’t selling it,” Mr. Verna said. “If Amazon is trying to hurt Apple and Google’s business, this isn’t going to do it.”
Amazon likes to focus on the long term, however. And in the long term, it is banking on content being king.
“People get these devices to watch Netflix, Amazon Prime, Hulu and YouTube. If you don’t have all four of those things, you have an inferior device,” said Mr. McQuivey, the Forrester analyst. “And given how expensive the devices can be, particularly Apple TV, it’s a lot to ask a customer to pay that kind of money to only get three-fourths of the content you really want.”