Retailers Put Amazon’s Kindle in the Crosshairs

Now Wal-Mart's (NYSE: WMT  ) just rubbing it in.

Fresh from announcing it would stop carrying the Kindle tablets sold by Amazon.com (NASDAQ: AMZN  ) , Wal-Mart just rolled out another nationwide promotion of Apple's (NASDAQ: AAPL  ) competing device. According to Reuters, Wal-Mart stores will be offering discounted iPad options including a free $30 iTunes gift card to customers who buy the tablet over the next 30 days.

Millions of consumers might be conflicted about which tablet to pick this holiday season, but the nation's biggest physical retailer is certain: It has placed its bet on Apple.

Of course, Wal-Mart is also responding to Amazon's encroachment into its space. The two giants of the physical and e-retail world have been on a collision course for some time now. Amazon should reach $22 billion in sales this holiday quarter, up from $17 billion in the year-ago quarter. And online sales continue to grow much faster than physical store purchases. The Kindle tablet is a major strategic push to keep that growth going. Amazon hopes to boost both digital and physical goods shopping through the company's tablet devices.

Wal-Mart understandably doesn't want to help that strategy along. And the company isn't alone in the retail rebellion against Amazon's tablets. Target (NYSE: TGT  ) pulled Kindle devices from its shelves back in May. The company was reacting to Amazon's "showrooming" strategy, which Target thought had gone too far. Company executives told their vendors at the time that "what we aren't willing to do is let online-only retailers use our brick-and-mortar stores as a showroom for their products and undercut our prices."

Apple's iPad offers no such threat to Wal-Mart, and so the working relationship between the companies should only deepen. Promotional iPads were a key part of Wal-Mart's successful Black Friday events last month, after all. As Apple hopes to push a more affordable product line and as Wal-Mart tries to fend off e-commerce challenges, the two companies have every reason to team up for the holidays.

Everyone knows Amazon is the big bad wolf in the retail world right now, but at its sky-high valuation, most investors are worried it's the company's share price that will get knocked down instead of competitors'. We'll tell you what's driving the company's growth, and how to know when to buy and sell Amazon in our new premium report. Our report also has you covered with a full year of free analyst updates to keep you informed as the company's story changes, so click here now to read more.


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