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Wal-Mart becomes latest retailer to drop Kindle

09/25/2012

Amazon's line of Kindle tablets, despite being the best-selling e-book reader in the world and having just launched five new models at the beginning of September, are now being dropped by big-box retailer Wal-Mart.

A pricing dispute with Amazon means no more Kindle tablets or readers will be sold at Wal-Mart once the remaining stock has sold out, according to a statement by one of their representatives on Thursday. Other companies' tablets and readers will still be available.

According to Julianne Pepitone at CNN Money, the company declined to comment specifically on the decision, instead issuing a general statement, saying that, "Our customers trust us to provide a broad assortment of products at everyday low prices, and we approach every merchandising decision through this lens."

Morningstar analyst R.J. Hottovy had this to say about the decision: "Amazon is clearly becoming a more attractive consumer retail destination, so it was inevitable that Target or Wal-Mart would stop selling the Kindle product. They perceive Amazon as a potential threat, and this is one way to neutralize that."

Despite the conflict between Amazon and Wal-Mart, there is little to believe that this will significantly affect either retailer's profits. According to Mae Anderson at The Associated Press, "Amazon has been selling lower-priced tablets at thin-if any-profit margins to boost sales of digital media like books and music from its online store. That makes it less attractive for major retailers to carry Kindles in their stores, particularly as online retailers like Amazon.com become more of a threat for traditional brick-and-mortar stores."

Wal-Mart is not the only retailer to stop selling the Kindle line of products. Target, which began selling Kindles in 2010, stopped selling them in May, making them the first retailer to stop carrying the devices. A reason for the decision was not provided by the retailer.

According to a J.D. Power and Associates tablet satisfaction study last week, Apple's iPad has the highest consumer satisfaction, followed by the Kindle tablets, of which Amazon says have captured 22 percent of U.S. tablet sales over the past nine months.

Amazon's Kindle continues to be sold by a few big name outlets, such as Best Buy, Staples, and Radio Shack.

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