Today: Seattle tech giants aim for Silicon Valley companies' popular streaming-video, virtual-assistant offerings with new launches. Also: Tesla shoots higher while battling New Jersey's ban.
The Lead: Amazon announces streaming-video box, Microsoft shows off Siri rival
The technology stars that reside in the Pacific Northwest threw down a challenge to Silicon Valley tech giants Wednesday with a pair of announcements that introduced new products that trod on the ground of Apple, Google and others.
Amazon unveiled a new streaming-video box Wednesday morning that offers similar functions to the Apple TV at the same price, but with voice search and video-game options. A short time later, Microsoft showed off an update to its operating system that includes a voice-activiated virtual assistant that seems to combine the key features of Apple's Siri and Google Now.
Amazon's effort will challenge more than just Apple, with Google's Chromecast and several options from Roku also among the options consumers have to stream Internet video to their televisions. Research firm Strategy Analytics says that Apple leads the market, with Roku and Google trailing in a sector the firm expects to grow 24 percent this year.
The pricing of the offering seems to suggest that Amazon is aiming squarely at being an alternative to Apple's device, and Piper Jaffray analyst Gene Munster said in a note Wednesday that Apple will need to upgrade its product to match Amazon's gambit.
"We believe the launch of the Amazon Fire TV highlights Apple's necessity to aggressively update its Apple TV offering and ultimately introduce a full television," Munster wrote. "Given the breadth of content available on Amazon's offering in addition to gaming capability and voice control, two features we have expected from Apple TV, we believe that Apple will launch at least an updated Apple TV by the back half of 2014 if not sooner."
While the box will offer Netflix compatibility, it seems to be more focused on delivering Amazon's rival streaming service, which is bundled with the Seattle company's Prime membership subscription offering. It will also likely grow to offer more functionality focused on Amazon media purchases.
"The company will eventually want to help you buy things in the living room," Forrester Research analyst James McQuivey told Reuters. "Only Amazon can piece that entire experience together in the living room and though we don't see evidence of that ambition here today, we should assume Amazon knows this and is planning on it."
"This is about selling Prime," Wedbush Securities analyst Michael Pachter told Bloomberg News. "It really does open up their ability to deliver a lot of stuff."
Microsoft's new virtual assistant, dubbed Cortana after a character in the "Halo" Xbox game series, was part of the launch of its Build developers conference in San Francisco, which included a bundle of updates for the company's Windows 8.1 operating system focused on mobile. Cortana will offer the conversational tone of Apple's Siri with personalization options like Google's similar Google Now service.
"Siri is this anthropomorphized character, but Siri doesn't know you personally," Microsoft executive Joe Belfiore told the New York Times.
The announcement of Cortana was just one aspect of the keynote address, which included an appearance by Microsoft's new CEO, Satya Nadella. With the rest of the updates to Windows, Microsoft seemed to be bringing their mobile, desktop and Xbox offerings closer together, with the biggest departure from Microsoft's past being the offer of free operating system updates for users of smartphones and tablets.
"Our vision, simply put, is to thrive in this world of mobile first, cloud first," Nadella said. "Our goal is to really build platforms, create the best end-user experiences, the best developer opportunities and IT infrastructure for this ubiquitous computing world."
Analysts were impressed, with FBR Capital Markets' Daniel Ives calling Wednesday's announcement "a good and logical first step," and IDC research analyst Al Hilwa saying Microsoft will be "much more consolidated under a single structure than ever before."
Microsoft dropped 0.3 percent to $41.28 on the day, while Amazon also declined 0.3 percent, to $341.96. Apple gained 0.2 percent to $542.55 after the Wall Street Journal reported the Cupertino tech giant was looking at purchasing a Japanese manufacturer of smartphone display chips for up to $1 billion. Google held steady while expanding its software-defined networking effort, gaining 21 cents to $1,135.10, and Netflix dropped 0.5 percent to $362.88 after winning a Peabody Award.
SV150 market report: More Wall Street records as Tesla fights New Jersey move
Wall Street stayed hot Wednesday, with the Dow Jones and Standard & Poor's 500 indexes closing at record highs, but Silicon Valley tech stocks dipped slightly despite a big gain for Tesla Motors.
Tesla continued its recent stock market rebound with a 6.1 percent advance to $230.29 after officially saying it will file a lawsuit against the state of New Jersey that seeks to overturn a ban on the company's direct-sales structure in that state. The Palo Alto electric car maker filed notice of its intent to appeal the decision in the court system last week, after it had managed to find a compromise with Ohio as well as New York, both of which had contemplated making the same move as New Jersey. In addition to those compromises that preserve sales in large states, Tesla has also benefited from the end of a federal investigation into car fires in the company's Model S.
Twitter dropped 2.7 percent to $45.73 as a ban the San Francisco company's microblogging service faced in Turkey was officially struck down by the country's highest court. Rival Facebook gained 0.2 percent to $62.72 after R.W. Baird analyst Colin Sebastian reiterated an "Outperform" rating on the Menlo Park company's stock, writing, "large-scale social platforms are disproportionately benefiting from the rapid shift to mobile." Intel dropped 0.4 percent to $25.89 but recovered in late trading after Piper Jaffray analyst Ruben Roy released a positive note on the Santa Clara chipmaker, and rival Applied Micro jumped 4.3 percent to $10.76 after Evercore Partners analyst Michael Lucarelli predicted that a new offering could double the company's revenues. Cisco fell 0.5 percent to $22.99 after J.P. Morgan analyst Rod Hall wrote that the San Jose networking company's recent weakness in emerging markets is likely to continue this quarter.
Up: Tesla, SunPower, NetApp, Hewlett-Packard, Applied Materials, Gilead, Yahoo,
Down: Yelp, Splunk, Workday, Twitter, LinkedIn, VMware, SolarCity, Zynga, EA, Salesforce, eBay, Pandora, Sandisk, Oracle, Symantec
The SV150 index of Silicon Valley's largest tech companies: Down 2.14, or 0.14 percent, to 1,549.95
The tech-heavy Nasdaq composite index: Up 8.42, or 0.2 percent, to 4,276.46
The blue chip Dow Jones industrial average: Up 40.39, or 0.24 percent, to 16,573
And the widely watched Standard & Poor's 500 index: Up 5.38, or 0.29 percent, to 1,890.90
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.