Amazon's move to pull Google, Apple streaming devices 'pretty dumb,' analyst says

By the end of the month, Amazon (NASDAQ: AMZN) shoppers won't be able to buy Apple TV (NASDAQ: AAPL) or Google Chromecast (NASDAQ: GOOG) streaming devices from the online retail giant's website. While ostensibly made to prevent "customer confusion," some analysts are scratching their heads.

Amazon told its marketplace sellers that the move was made to prevent consumers from being confused because neither device is able to stream its Prime Instant Video content, Bloomberg and The Wall Street Journal reported.

Roku devices will continue to be sold via Amazon.com, as will Sony PlayStation and Microsoft Xbox (NASDAQ: MSFT) consoles, the retailer said. All of these devices have Amazon Instant Video app support.

While its Fire TV and Fire TV Stick are best-sellers on Amazon's site, their overall sales fall well behind those of Roku and Chromecast devices, according to a Parks Associate report. "Roku continues to lead streaming media device sales in the U.S. with 34 percent of units sold in 2014. Google is second with 23 percent, and new entrant Amazon overtook Apple for third place," said Barbara Kraus, director of research at Parks, in an August report.

The impact on Google and Apple's device sales, if any, won't be known for at least a quarter or two. Kraus told FierceOnlineVideo that the loss of sales via Amazon would be at most "a faint blip on the radar" for both companies. The biggest effect, she said would be on the companies' strategy and objectives for their streaming devices going forward.

Pulling Chromecast and Apple TV from its sales list may sour some customers on Amazon, according to Dan Rayburn, an analyst with Streaming Media. "It's a strategic decision on Amazon's part. But it does hurt Amazon's customer experience, as one of the main reasons I shop at Amazon is due to their selection. Having less inventory is a bad thing for Amazon overall," he said.

Colin Dixon of nScreenMedia called it a "pretty dumb move" in an email to FierceOnlineVideo. "The excuse that Apple TV and Chromecast don't work well with Amazon Prime Video is a pretty weak one. Particularly in the case of Chromecast, which has an open API. It is Amazon that has chosen not to fully support it, not Google. It opens the company up to accusations of monopolistic practices, even if they don't stand the test of the courts. 

"I expect it will hurt them as much as it hurts Google and Apple. That said, Chromecast will be impacted more than Apple. Many people shop direct from Apple, but not so many from the Play store," he said.

Kraus agreed that the move will impact all three companies to some degree. "You want people to come to your store," she said, adding that buyers who have their heart set on an Apple TV for example will simply go elsewhere to buy it. "It's not in their best interest. ... I really don't see why they made this move."

For more:
- see this WSJ article
- see this Bloomberg article

Related articles:
Amazon refreshes Fire TV, adding 4K capability and gaming option
Roku reportedly will announce 4K-capable device in wake of Amazon Fire TV update
Roku, Chromecast top streaming device purchases, usage, research firms find

Updated Oct. 2 to include commentary from Parks.

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