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Roku launching UK's cheapest 4K streaming stick

Roku Inc. is releasing the U.K.'s cheapest ultra-high-definition streaming stick as its battle with Amazon.com Inc. for control of the country's smart TVs heats up.

The Roku Premiere is a £40 device that plugs into an internet-connected television to let users stream on-demand and live video in 4K. It comes with a remote that also offers voice controls and dedicated buttons for apps such as Netflix and Spotify.

Aside from device sales revenue, Roku takes a cut every time a viewer subscribes to a paid service and through targeted advertising on its ad-supported channels.

Amazon offers similar features on its Fire TV range that costs between £40 and £110. Its line-up comes with its voice assistant Alexa built-in, allowing users to control compatible smart home devices.

The new Roku stick launches in the U.K. in October alongside an upgraded version of Roku's entry-level Roku Express stick (£30). Roku is also cutting the price of its top-tier Roku Streaming Stick+ to £50.

Amazon and Roku are also looking at the bigger picture — specifically smart TVs.

Both are debuting sets in the U.K. as part of a wider expansion into Europe, the two companies revealed in back-to-back announcements at the IFA tech conference in Berlin, Germany earlier in September. Competitive pricing is set to play a part.

The two will likely target the budget smart TV market, analysts previously told S&P Global Market Intelligence, as premium sets are already the domain of bestselling brands such as Samsung Electronics Co. Ltd. and LG Electronics Inc.

Despite the popularity of smart TVs, analysts claim that streaming sticks are not going anywhere in the short-term. Device sales are forecast to rise by 15% this year to 4.5 million, according to shipment data from Strategy Analytics, a data and analysis firm specializing in technology and media. The market is also home to Google LLC's Chromecast streaming sticks, Apple Inc.'s Apple TV box, and NVIDIA Corp.'s Shield TV media player.

"Streaming sticks are portable, affordable, and easy-to-use," explained Toby Holleran, senior analyst at Ampere Analysis, a data and analytics firm that focuses on the TV, telecommunications and content markets.

Streaming sticks allow users to easily upgrade to the latest-generation product, according to David Watkins, a director specializing in connected home devices at Strategy Analytics. Sales of these devices will peak in 2023 at 37% of U.K. households, Watkins said, while smart TV ownership will have reached over 80% of homes by that time, up from 47% now.

Even with the upcoming additions, however, Roku still has a long way to go to catch up with its North American output. The company already boasts a hundred smart TV models in the region, while its stacked U.S. roster also includes seven streaming sticks — two sold exclusively through Walmart Inc.and an upcoming soundbar.