It looks like Amazon has lost another ally in the slate race, as Wal-Mart has announced it will no longer sell the Internet giant’s Kindle tablets and eReaders, in a move that highlights how seriously Amazon is viewed as a competitor in the retail world.
Claiming the decision “is consistent with our overall merchandising strategy,” Wal-Mart gave no other reason for dropping the popular product line, saying in an e-mail that it would no longer carry the devices beyond its current inventory. While the retail monster will continue selling similar offerings from companies like Apple, Google, Samsung and Barnes & Noble, it is obvious there is more to their reasoning.
With earlier black-and-white Kindles only offering users the ability to read digital books, the newer Kindle Fire marks Amazon’s jump into the tabletsphere, bringing customers instant access to books, movies, games and anything else Amazon sells. With its online shopping platform covering a broad spectrum of products, Amazon has become a top competitor for brick-and-mortar retailers, like Wal-Mart.
Furthermore, with a relatively low price tag compared to Apple’s high-end iPad, the Kindle Fire and other Amazon gadgets are only marginally profitable for retailers. Amazon can offer the eReaders and tablets at $200 or less because it will make money off eBook sales and goods ordered through the devices. Yet, that isn’t appealing to Wal-Mart, which has to compete against Amazon at the same price.
Sam Walton’s family chain isn’t the first retailer to drop the Kindle line, with Target removing Amazon’s offerings from its stores back in May. While electronic vendors like Best Buy and RadioShack will continue selling the famed line, this latest dumping could hinder Amazon’s holiday sales. Despite most people purchasing Kindles from the company’s website, Amazon will still need an outlet to get their hardware in the hands of consumers, especially during the heightened shopping season.
Perhaps this will be the catalyst that inspires Amazon to open a retail store of its own. Let us know what you think on the TabletPCReview forums!