Amazon has been rushing to finalize and release a set-top box in time for the holidays, designed to compete directly with the Apple TV and Roku. However, The Verge has learned that the company recently made the decision to delay the device, possibly beyond the holiday season. Sources say that the box is based on a fork of Android just like the company's Kindle Fire tablets, and that Amazon was going to allow third party apps in addition to its own services. In fact, much of the same code that works with Amazon's tablets can also be applied to Amazon's TV product, implying that the box runs some version of Fire OS.

Although third party apps would be a differentiator for Amazon, obviously the premier feature would be access to the company's library of Prime videos. Amazon has been pushing its Prime video service hard of late, offering offline viewing on the Kindle Fire HDX and developing its own original shows as well. A set-top box makes perfect strategic sense for Amazon and had been widely expected in time for Christmas shopping this year.

Another Lab126 project

In April, Bloomberg Businessweek reported that the box was being developed at Amazon's Lab126 facilities — the R&D division where many of the company's consumer products are designed. There has been a lot of reported activity coming out of Lab126 over the last year, beginning with an aggressive expansion, followed by testing of advanced wireless standards and even wild rumors of a smartphone with five cameras and a 3D interface.

The Wall Street Journal reported last month that the set-top box had been pushed back to this fall, but this more recent delay makes it increasingly unlikely that Amazon will be able to release it in time for the holiday season. It would likely have been a big seller for the company given its history of aggressive pricing. It still could be — just not as soon as CEO Jeff Bezos hoped.