Amazon Gears up to Sell Fire TVs
Amazon Expands its Private Label Empire
Amazon (AMZN) is entering the television market, announcing two branded Fire TVs which will include Alexa, its voice assistant. This marks Amazon’s latest push to expand its private label business which already includes apparel, groceries, home decor, and other items.
Amazon is pricing its two new TVs competitively. The Fire TV Omni Series is starting at $409.99, and the Amazon Fire TV 4 Series will start at $369.99. Consumers can purchase the TVs in October from Amazon or through Best Buy (BBY).
TVs Are a Low-Margin Business
By launching branded TVs, Amazon is entering an area of consumer electronics which is known for low margins. Apple (AAPL) has looked at the market for years, but so far has only launched a streaming device and video streaming service, Apple TV+. Low margins likely will not deter Amazon, which has shown its willingness to chase market share at the expense of profits in other areas of its business.
Amazon’s Fire TV operating system has been in Toshiba and Best Buy brand TVs for several years. Amazon said it will continue to maintain its partnerships despite launching competing products. On Thursday the online retailer also announced new Fire TVs from Toshiba and Pioneer.
Competition Heats Up
Amazon wants to differentiate its TVs by equipping them with far field voice controls. This technology enables users to ask Alexa questions without a remote. The TVs will range in size from 43 to 75 inches and boast 4K resolution. Later in the year Amazon plans to roll out an update which will let customers control smart devices in the home via a dashboard on the TV.
Amazon’s FireTV streaming sticks are currently leading in the industry, but rival Roku (ROKU) is closing in. This has prompted Amazon to spend more money on its streaming service and smart devices. It will be interesting to see how consumers respond to Amazon’s latest big initiative.
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US Airline Operators See Impact of Delta Variant
Rising Case Numbers Slows Airline Industry Recovery
Recovery for the airline industry appears to be slowing, at least for now, as rising COVID-19 cases dampen consumers’ interest in flying. American Airlines (AAL), Delta Air (DAL), United Airlines (UAL), Southwest Airlines (LUV), and JetBlue (JBLU) all reported a slowdown in bookings and an increase in cancellations during August.
Most analysts did not expect this trend for airlines. Of the industries hit hard by the pandemic, airlines were poised to have a quick recovery due to pent-up demand for travel. Earlier this summer, airlines could barely handle the demand from vaccinated travelers ready to vacation again. However, rising cases of COVID-19 have caused many consumers to rethink their travel plans.
Airlines Reduce Capacity
United Airlines is among the airline operators reducing capacity for the rest of 2021 to match current demand. United also scaled back its profit forecasts for the third quarter and warned that it will likely lose money in the last quarter of the year if demand stays at its current level.
Meanwhile, Southwest Airlines is seeing losses in its current quarter as a result of cancellations and lower bookings. Sales in August were at the low end of its target, while weaker bookings from travelers have continued for September and October. The airline also expects flying capacity in the fourth quarter to be 5% lower than it was two years ago.
Though it has been an unexpectedly difficult period for airlines, they do not expect the downturn to be permanent. United said in a recent filing that the current increase in COVID-19 cases has had less of an impact than previous increases and will likely be temporary. Once cases peak, United expects bookings to increase again. Meanwhile, Delta Airlines said it saw bookings stabilize in the past two weeks. It expects that in about 90 days, travel will pick up again.
After more than a year and a half of the pandemic, airlines have practice dealing with fluctuating demand. While the Delta variant is slowing down the industry’s recovery, airline operators are optimistic that this will be temporary.
Friday Fundings: Wave, Snyk, and Scalapay
Mobile Money Startup Raises $200 Million
Wave, a mobile money provider based in the US and Senegal, raised $200 million in venture funding. The Series A round, which was led by Sequoia Heritage, Founders Fund, Stripe, and Ribbit Capital, values Wave at $1.7 billion. It marks the biggest Series A round for a sub-Saharan Africa startup in history.
The investment comes as the mobile money market in sub-Saharan Africa is booming. So far in 2021, $500 billion has moved between 300 million mobile money accounts in the region. Proceeds from the fundraising round will be used to expand in Senegal and Ivory Coast and to grow the company’s headcount of product developers, engineers, and business support staff. Wave also wants to enter new markets, including Uganda.
Security Scan SaaS Obtains a $8.5 Billion Valuation
Snyk, a security scanning platform for developers, raised $530 million in a Series F round, giving it a valuation of $8.5 billion. Snyk raised $300 million in new capital, with investors buying existing shares for the remaining $230 million. The startup's Software-as-a-Service platform enables developers to spot security holes and license violations in their code. The platform is used by developers at Google (GOOG), Intuit (INTU) , and Salesforce (CRM), among others.
What makes Snyk unique is its ability to spot problems in real time as developers write code. Snyk plans to use proceeds from the fundraising round to develop new products and enhance its existing technology.
BNPL Startup Raises $155 Million
Scalapay, a buy-now, pay-later startup out of Italy, raised $155 million in funding. The Series A round was led by Tiger Global and included participation from Baleen Capital and Woodson Capital. Scalapay is among the BNPL startups riding the popularity of paying for online items in interest-free installments. Earlier this week, PayPal (PPYL) paid $2.7 billion for Paidy, a Japanese BNPL startup.
Scalapay plans to use the funding to expand its headcount and operations. It will also use the money to scale in international markets and to land merchants in luxury, fashion, and travel.