The world's largest Internet retailer
) Kindle tablets and e-readers will no more be sold at
) stores after the current stock is cleared.
However, Wal-Mart will continue to sell other tablets from
Barnes & Noble
) and Samsung. This puts Amazon on the back foot, giving the other
players an advantage heading into the holiday season.
However, it comes as no surprise given the growing animosity
between Amazon and brick-and-mortar retailers over the past few
years. In fact, another major retailer,
) also stopped selling Amazon devices earlier this year. Amazon
will therefore have to contend with just
). Although it remains unclear how these two will go, it is
unlikely that these alliances will last much longer. Demand for
Kindles this holiday season could be the only thing holding them
Amazon has crept up on these retailers, with its "free shipping"
and products that were not marked up to include sales taxes. As
popularity of the Kindles increased, these stores benefited from
extra sales. However, they lost out in other areas because
customers tended to examine many other goods in the stores and then
complete the purchase online. Walmart also has a thriving online
business, but it still lags market leader Amazon.
As retailers push out Amazon devices, the Internet retailer may
be forced to set up outlets to showcase its products. This would
drive up costs for the company and could also result in the
incidence of sales taxes.
Amazon's second quarter results were more or less within
expectations. Reported revenue of $12.83 billion was down 2.7%
sequentially and up 29.5% from the year-ago quarter. This was
better than the guidance for the quarter of $11.9-13.3 billion
(down 4.4% sequentially, or up 27.1% year over year at the
mid-point) and in-line with consensus expectations. Year-over-year
revenue growth was 32%, excluding an unfavorable currency
Currently, Amazon has a Zacks #3 Rank, which implies a Hold
rating in the near term.
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