Target Kisses Amazon.com's Kindles Goodbye
May 3rd 2012 10:10PM
Updated May 3rd 2012 10:12PM
Earlier this week, The Verge reported that Target was looking to phase out Amazon's hardware offerings, referring to its popular Kindle lineup of e-readers. An unnamed source said the decision was due to a "conflict of interest," without elaborating further. Seeing as how Amazon's primary goal in life is to undercut anyone and everyone including brick-and-mortar retailers of every flavor, I'm guessing that conflict might just be that Target is no longer interested in helping Amazon take over the world.
Target has responded with an official statement, simply saying that it "continually evaluates" its offerings and will continue to offer Barnes & Noble's (NYS: BKS) Nook e-reader.
Well, others are making note of the fact that Apple (NAS: AAPL) and Target have recently taken their relationship to the next level -- the one right before you swap keys to each other's apartments. Just this year, Apple is beginning to set up mini-Apple stores within Targets, much like the ones it already has in your local Best Buy (NYS: BBY) , whose locations are already a dying breed -- starting with these 50.
Theoretically, Apple could be trying to cut in on Target and Amazon and pressuring the retailer to ditch the e-tailer. It's easy to believe that Apple's products collectively bring in more sales, although on Black Friday last year, Target announced that the Kindle Fire was the best-selling tablet in stores, including the iPad.
I find this an unlikely angle, though, since Apple can't just go around dictating what its retail distribution partners put on their shelves. Best Buy stores carry an entire slew of Google Android tablets that sit directly next to iPad displays, and they vastly outnumber Apple's tablet. Why would Target be any different?
We may never know what this "conflict of interest" refers to, but one thing is for sure: Target is kissing Kindles goodbye.
At the time this article was published Fool contributor Evan Niu owns shares of Amazon.com and Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Best Buy, Amazon.com, Google, and Apple. Motley Fool newsletter services have recommended buying shares of Apple, Google, and Amazon.com, creating a bull call spread position in Apple, and writing puts on Barnes & Noble. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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