Amazon Devices Out of Walmart Stores - Analyst Blog
September 24 2012 - 5:15AM
Zacks
The world's largest Internet
retailer Amazon.com, Inc.’s
(AMZN) Kindle tablets and e-readers will no more be sold at
Wal-Mart (WMT) stores after the current stock is
cleared.
However, Wal-Mart will continue to
sell other tablets from Apple Inc. (AAPL),
Google (GOOG), Barnes & Noble
(BKS) 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,
Target (TGT) also stopped selling Amazon devices
earlier this year. Amazon will therefore have to contend with just
Best Buy (BBY) and RadioShack
(RSH). 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
back.
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 impact.
Currently, Amazon has a Zacks #3
Rank, which implies a Hold rating in the near term.
APPLE INC (AAPL): Free Stock Analysis Report
AMAZON.COM INC (AMZN): Free Stock Analysis Report
BEST BUY (BBY): Free Stock Analysis Report
BARNES & NOBLE (BKS): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis Report
RADIOSHACK CORP (RSH): Free Stock Analysis Report
TARGET CORP (TGT): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis Report
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