his week, Walmart announced that it would no longer carry Amazon's Kindle Fire tablet and Kindle e-readers, a move that is widely considered a pointed jab at the popular online retailer. Walmart will continue to sell tablets from other companies like Apple, and did not explain why it had singled out Amazon for exclusion. Walmart isn't the first retail chain to ditch the Kindle: Target did the same thing in May, suggesting that the country's largest brick-and-mortar chains are starting to view Amazon as an existential threat to their business. Here, a guide to Walmart's war against Amazon:
What's so threatening about the Kindle?
Walmart and Target view the Kindle as a "Trojan horse," since the gadget makes it easier for customers to buy products from Amazon. And not just books and movies. "Every time you pick up your Kindle, they're trying to get you to buy patio furniture" at Amazon, Colin Gillis, an analyst, tells The New York Times. "If I were Walmart, I certainly would not be encouraging my customers to go down the path of owning a Kindle and buying things from Amazon."
Will it dent Walmart's profits?
Hardly. "Amazon has been selling lower-priced tablets at thin — if any — profit margins to boost sales of digital media" from its online store, says Mae Anderson at The Associated Press. "That makes it less attractive for major retailers to carry Kindles in their stores."
How about Amazon's Kindle sales?
Not likely. "A vast majority of Kindle sales are made through its website," says Roger Cheng a CNET. However, Amazon could find itself in trouble if other retailers follow suit, depriving the company of valuable real estate in places where people shop. "Amazon still needs a way to get the hardware into people's hands," says Gillis.
Will other retailers drop the Kindle too?
They probably should. Retailers like Best Buy, RadioShack, and Office Depot say they will continue to carry Kindles, but they may soon realize that Amazon is not their friend. It's just a matter of time before other stores realize that "selling your competitor's major method of gaining customer loyalty" probably isn't "all that great an idea," says Tim Worstall at Forbes.
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