In the battle for tablet supremacy, things just got a little harder for Amazon. Sept. 20 various sources are claiming that Wal-Mart will no longer support or sell any of Amazon's line of Kindle Fire tablets or eReaders.
Online retail giant Amazon has a huge audience for selling their tablets and Kindle eReaders on the web, but when you don't have a physical storefront you need all the outlets you can get your hands on.
This marks the second major chain in six months to stop offering Amazon's products, after Target quit carrying Amazon devices in April. And you have to wonder why.
It seems like the company is making a bet that consumers are just more interested in other devices. This is what Wal-Mart had to say Sept. 19 in a memo to store management nationwide: "We have recently made the business decision to not carry Amazon tablets and eReaders beyond our existing inventory and purchase commitments," "This includes all Amazon Kindle models current and recently announced."
We don't have to tell you Wal-Mart is one of the largest chains across America. However, according to Reuters while they lead the charge in sales, their online sales are actually quite poor. In fact, Wal-Mart is getting beat out online by many across the board, including Amazon. A Wal-Mart spokeswoman said they'll continue to sell "a broad assortment" of eReaders and tablets in the future.
We can't help but wonder if this is a reactionary move by Wal-Mart. Are they feeling threatened that Amazon offers so many of the same things they do online and just don't want to help the competition? Could this be a huge opportunity for companies like Microsoft, Google, Samsung, and Barnes & Noble? Or is this a sign Wal-Mart is actually looking to get into the hardware game themselves? Best Buy has Dynex and Insignia, could Wal-Mart be preparing something of their own too?
Amazon wants to get its tablet into the hands of consumers and -- like many tech companies right now -- make it a cash register of sorts, said Scott Tilghman, an analyst at Caris & Company. The case could be made that if Wal-Mart and Target sell Kindle tablets, they are cannibalizing their own sales because Amazon aims to capture sales to consumers, be it ebooks or a long list of other items, he said.
At the same time, Amazon's margins on selling Kindle are believed to be thinner than those of other gadget makers, in particular Apple. As a result, Amazon may not have much in the way of profits to share with retailers like Wal-Mart.
"I think part of it could be margin, though the bigger point is that Wal-Mart and Target view Amazon as a competitor," Tilghman said.
Amazon's e-readers 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.
Tablet owners are most satisfied with Apple's iPad, followed closely by Amazon's products, according to a J.D. Power and Associates tablet satisfaction study released last week.
Much of the hype surrounding Amazon's second generation Kindle Fire Tablet, Kindle Fire HD, has centered on why the device's reading apps set it apart.
"Immersion Reading" allows Kindle books can be synchronized with Audible audiobooks allowing you to read and listen at the same time.
"X-Ray for Books," and textbooks lets you tap a page in a book to find out more information on characters, places in a book or related YouTube content.
"Time to Read" uses your reading speed to tell you when you will finish a chapter in a book on the Paperwhite.
"Kindle FreeTime" lets parents create profiles for their children and choose what books, games, apps or videos they can access.
Will superior reading apps be enough for Amazon to maintain a presence along with the big boys? Shares of Wal-Mart were up 0.5 percent at $74.74 on Sept. 20, while shares of Amazon.com were down 0.9 percent at $259.33. You tell us.
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