Wal-Mart Drops the Kindle

By: NY Times Email
By: NY Times Email

Wal-Mart Stores, the nation’s largest retailer, said Thursday that it was dropping Amazon’s Kindle tablets and e-readers, a sign of how seriously it views Amazon as a competitor in the consumer goods market, report Stephanie Clifford and Julie Bosman on Friday in The New York Times.

Target has already stopped selling Kindles, though other stores, including Best Buy, Staples and Office Depot, said Thursday that they would continue to carry the devices.

Wal-Mart did not say why it was discontinuing its Kindle sales, but analysts said physical retailers have been worried about customers who browse in stores and then buy from online competitors instead. The newer Kindles are particularly worrisome to retailers because they can be used for e-books, movies, games and potentially anything Amazon sells, thanks to a built-in Web browser.

Colin Gillis, a technology analyst for BGC Financial, told The Times that by selling Kindles, Wal-Mart was giving customers a reason to step into the Amazon ecosystem.

“Every time you pick up your Kindle, they’re trying to get you to buy patio furniture” at Amazon, Mr. Gillis said. “If I were Wal-Mart, I certainly would not be encouraging my customers to go down the path of owning a Kindle and buying things from Amazon.”

At the same time, analysts said, the Kindle line was only marginally profitable for retailers.

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