Bloomberg reports that Amazon is planning to release their own "hockey puck" set-top box this fall, which will, like their theoretical smartphone, enter a very crowded marketplace.
If, like the story says, it is designed to connect people primarily to the Amazon Instant Video service, that's great, but so does my Roku. Bloomberg describe Amazon's interest in driving developers to create apps for Amazon's own ecosystem, presumably to support the theoretical phone and set-top box in addition to their Fire tablets.
Amazon should have done this three years ago, to be honest. This is a very uphill fight at this point, even with their enormous user base. Were I them, I would instead focus resources on being the premier distributor of digital media across various platforms, instead of sinking yet more money into a non-starter of a platform. They are up against Apple, Google, Microsoft, Sony, Roku, Boxee, (less so) Nintendo, and TV manufacturers themselves.
The team working on it doesn't scream "content disruption geniuses", either:
The set-top box is being developed by Amazon’s Lab126 division in Cupertino, Calif., which has toyed with building TV-connected devices for several years, the people familiar with the effort say. The project is being run by Malachy Moynihan, a former vice president of emerging video products at Cisco Systems (CSCO) who worked on the networking company’s various consumer video initiatives. Moynihan also spent nine years atApple (AAPL) during the 1980s and 1990s. Among the other hardware engineers working at Lab126 with considerable experience making set-top boxes are Andy Goodman, formerly a top engineer at TiVo (TIVO) and Vudu (WMT), and Chris Coley, a former hardware architect at ReplayTV, one of Silicon Valley’s first DVR companies.
Proximity to Apple HQ and résumé credits there from the 80's and 90's don't equal instant success. I'll say this much: they're DOA if they don't support ecosystem-wide search like the Roku 3 out of the box.
Amazon has financed TV pilots for original shows, and are locking up their own Netflix and Hulu-like exclusive deals. I'm not counting them out, but they really need to make a bold move that sets them apart from both the existing hardware and distribution behemoths to break away from the pack. If anyone has the buying power heft to outpace Apple, it's Amazon, but their track record does not inspire confidence.