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Amazon Cloud Player in Sonos Wireless

Read MoreHide Full Article, Inc. (AMZN - Free Report) has recently announced that its Cloud Player can stream music wirelessly through the Sonos Wireless HiFi System. Management has added Sonos to the compatible Cloud Player device list due to the popular demand from its customers.

John MacFarlane and Trung Mai founded the Sonos Wireless HiFi System in 2002. The vision of the company is to provide an out-of-the world experience of listening to music through the best sound quality possible.

Amazon’s Cloud Player is like a web storage application, which allows people to listen to their music from any computer or Android device with Internet access. It allows streaming on devices such as Kindle Fire, Android, iPhone, iPod Touch, Mac and PC. Amazon doesn’t give out exact numbers, but the Cloud Player has apparently won millions of users since its launch in early 2011.

Amazon lets users buy music from its own library of 20 million tracks and also allows imports from other sources. However, while Amazon has sweetened the deal by offering the first 250 songs free but anything in excess of 250 and up to 250,000 requires an annual subscription of $24.99 a year. Amazon currently offers the service to U.S. consumers alone, but one might expect expansion in international markets in the not-too-distant future.

Apple (AAPL - Free Report) on the other hand does not charge annually, but only for what users download. A song costs around 99 cents in the iTunes store, but is available for playback on any iCloud registered device at no extra cost..

Amazon’s strategy of including Sonos makes its service more ubiquitous. It is expected that since the inclusion of the Sonos system will bring more users to the Amazon cloud, it would help push sales of all its other digital goods. Therefore, while iTunes still leads in the segment, Amazon’s tactics could bring rapid market share gains for the company.

Amazon’s second quarter results were more or less within expectations. Reported revenue of $12.83 billion was down 2.7% sequentially and up 29.5% from the year-ago quarter. This was better than the guidance for the quarter of $11.9-13.3 billion (down 4.4% sequentially, or up 27.1% year over year at the mid-point) and in-line with consensus expectations. Year-over-year revenue growth was 32%, excluding an unfavorable currency impact.

Amazon is one of the leading players in the extremely fast-growing retail eCommerce market. While the strong growth prospects are making the market more competitive by the day, Amazon continues to maintain and even grow its share on the back of its consistent and reliable service. Amazon’s scale of offerings, its broad reach and platform approach are the keys to its success.

Currently, Amazon has a Zacks #3 Rank, which implies a Hold rating in the near term.

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