Amazon, Best Buy Smart TV Partnership Hurts Roku

Amazon, Best Buy Smart TV Partnership Hurts Roku

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by: Jayson Derrick, Benzinga Staff Writer

 

In a somewhat surprising development in the retail landscape, Amazon.com, Inc. AMZN 1.75% is teaming up with Best Buy Co Inc BBY 3.12%.

 

What Happened

As part of a new partnership, Best Buy will start selling Amazon's new Fire TV Edition smart TVs that can link up with its Alexa and Echo platforms. In fact, Best Buy will even include Amazon's technology within its private-label brand Insigna.

The partnership will include both online and offline purchases and Best Buy will also be a third-party seller on Amazon's platform.

 

Why It's Important

Best Buy has been selling Amazon's products including Echo, Kindle and Fire tablets in its stores for years so an expansion of a partnership "makes complete sense," Best Buy CEO Hubert Joly was quoted by CNBC as saying. Meanwhile, Amazon CEO Jeff Bezos says Best Buy's performance over the past five years has been "remarkable" and its transformation is a "business case study" that will be studied for a long time.

 

What's Next

Best Buy will introduce more than 10 4K and HD Fire TV Edition models this summer. Needless to say, Roku Inc ROKU 3.72% is likely to emerge the loser from the deal as a partnership of two industry titans could leave Roku's rival smart TV platform left behind.

Best Buy traded up about 4 percent to $75.59 on Wednesady afternoon, while Roku was down 8.8 percent at $32.80.

 

© 2018 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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