May 3, 2012

Why did Target boot the Kindle?

The e-reader was one of the retailer's big sellers. Is Apple clearing out the competitors before it comes to town?clearing out the competitors before it comes to town?
By Kim Peterson 22 hours ago
Image: Target © Bloomberg/Getty Images
The news sure sounds like a serious blow to Amazon which makes the Kindle and counts on Target and other stores for sales help.

Both companies are hush-hush about what's going on. The Kindle had been a big seller for Target, according to The Wall Street Journal.

It's hard not to look at the giant blaring coincidence in the middle of all this. Target is expanding the Apple  selections in its stores this year, in some cases going so far as to create a mini-store for the maker of iPads and iPhones.

Did Apple kick Amazon out? Are we seeing a brewing retail turf war between the two electronics makers? Here's another theory: Amazon has become such a strong competitor for Target that the partnership was bound to dissolve.

Tech site The Verge threw some fuel on the fire Wednesday, quoting a source saying Target was phasing out Kindles because of a "conflict of interest." The Verge posted an internal company memo about the phaseout, but the memo said nothing about the conflict.

The lovefest between Target and Amazon was going strong since June 2010. The Kindle Fire was even Target's best-selling tablet on Black Friday, according to The Verge.

Amazon needs Target because it can't physically show customers its Kindle line. Unless it opens its own retail stores -- and it's reportedly going to test one such store this year in Seattle -- it must rely on other retailers to show off the goods.

Apple is in a much better position because it already has its own retail stores (which do spectacularly well). And now, it's expanding its retail footprint with the new crop of mini-stores coming to Target. Apple appears to be working with Wal-Mart (WMT -0.19%) as well, and one Wal-Mart in Arkansas is even testing an expanded Apple display that looks jarringly clean and refined compared to the rest of the aisles.

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