Wal-Mart to Stop Selling the Amazon Kindle
Retailing behemoth Wal-Mart landing a telling blow to online retailer Amazon's ambitions for its tablet and e-reader devices today. They announced that they will no longer be selling the Kindle devices, instead focusing all of their attention on Apple's iPad.
Wal-Mart have been trying to catch up to Amazon with their own online sales for sometime, but they are insistent that the decision is not related to that particular battle, but is instead consistent with their overall merchandising strategy.
A major feature of the Kindle Fire HD is that it allows users to shop for millions of other items in addition to the usual e-books. This obviously places Amazon in direct competition to major retailers. Earlier this year Target stopped selling Kindle devices, and now Wal-Mart has joined forces with them.
The news increases speculation that Amazon will eventually open its own stores so that shoppers can buy Amazon products, and in particular the Kindle, in a real world store.
Amazon "is a little bit of a Trojan horse" when the Kindle is sold in other stores, said Sucharita Mulpuru, retail analyst at Forrester Research. "They should have made this decision to not carry the Kindle a long time ago."
"We have recently made the business decision to not carry Amazon tablets and eReaders beyond our existing inventory and purchase commitments," Wal-Mart said in a memo sent to store managers on Wednesday. "This includes all Amazon Kindle models current and recently announced."
For the time being however, other retailers are continuing to stock the Kindle. Best Buy and Radioshack have confirmed that they will continue selling the Amazon device..
In addition to the competitive threat posed by the Kindle, it is also rumoured that profit margins are slimmer on the Kindle than on other tablet devices, and therefore there is less money to share with retailers for stocking them.
If major retailers start viewing Amazon as a competitor however it seems only a matter of time before more start to follow Wal-Mart and Target.
Amazon's eReaders are the best-selling electronic readers, with the first version of the Kindle Fire tablet grabbing about a fifth of the U.S. tablet market. Amazon launched a range of new tablets earlier this month, some aimed at the top end of the market to compete with Apple's more expensive iPad.
Wal-Mart continues to sell iPads, Barnes & Noble Inc's Nook, Google Inc's Nexus 7, Samsung's Galaxy Tab and other tablets and eReaders.