Wal-Mart joined its fellow big-box retailer in booting the Kindle line of products from its stores, as brick-and-mortar retailers have grown more frustrated at the consumer practice of "showrooming," which Amazon has, at times, encouraged. Wal-Mart's decision is just the latest sign of retaliation. The online giant, of course, sells its Fire tablet at rock-bottom prices, with the intention that consumers will use it as a portal into its online retail warehouse and digital media offerings.
Fighting Fire with fire
The move seems like a smart one for the world's biggest retailer, as Amazon's online dominance poses an ever-growing threat, especially as the e-tailer adds distribution centers around the country, potentially cutting delivery time down to one day, or even same-day.
But as Amazon continues to grow its position in a wide range of industries, Wal-Mart's move raises the question of how many more of these rejections await Amazon as it attempts to leverage its size into new businesses.
Wal-Mart's and Target's decision, of course, is a boon for other tablet makers like Apple and Barnes & Noble. The bookseller formed its own strategic partnership earlier this year with Microsoft, when the Windows-maker said it would invest $300 million in the Nook.
Investors shrugged off the news, as Amazon shares dipped just 0.5% before quickly recovering and, while this announcement should not have any material impact on the company's financials, investors should keep an eye out for similar backlashes. Going up against stiff competition from heavyweights ranging from Apple to Wal-Mart could be a precarious position for a stock priced as highly as Amazon's.
Amazon is not only controversial as a company, but also as an investment. The stock has an unbelievable P/E ratio, above 300, and a market cap over $100 billion; yet, as it nears all-time highs, it's hard to question the wisdom of its investors. Now, you can get an inside look at what to expect from the company in the future in the Fool's new premium report on Amazon. It covers all the opportunities and risks for the online giant, and tells you key areas to watch as the company expands with new warehouses, and continues to pressure traditional retailers. As a bonus, the report comes with a year of free updates, so you won't have to parse through Amazon's earnings reports and any other important announcements that come out. To get access to this valuable insight today, just click right here.