off-Target —

Amazon’s Kindle line to disappear from Target store shelves

Amazon's Kindles no longer fit in with Target's "product assortment."

An internal memo circulating at Target indicates the chain intends to stop selling Amazon's devices, including the Kindle Fire, The Verge reported Wednesday. Though Kindle devices appear to have sold well in the past, the stock will no longer be replenished after May 13.

According to the memo, Target has reviewed its product assortment and has "made the decision to no longer carry Amazon hardware," giving no further reason for the split. The Verge believes the discontinuation is due to a conflict of interest, possibly a result of the Apple mini-stores set to arrive in 25 Target locations this year.

Target plans to feature the Kindle Touch in its in-store ads the week of May 6, but will stop receiving new stock of any Amazon hardware one week later. The Kindle Fire was Target's best-selling tablet on Black Friday in 2011, suggesting that poor sales are an unlikely motivator for the Kindles' disappearance from shelves.

Amazon still has three brick-and-mortar retail partners remaining, including Best Buy, Walmart, and Staples (all three offer Kindle products in-store only).

Target continually evaluates its product assortment to deliver the best quality and prices for our guests. Target is phasing out Kindles and Amazon- and Kindle-branded products in the spring of 2012. We will continue to offer our guests a full assortment of ereaders and supporting accessories including the Nook.

Casey Johnston
Casey Johnston is the former Culture Editor at Ars Technica, and now does the occasional freelance story. She graduated from Columbia University with a degree in Applied Physics. Twitter@caseyjohnston

What conflict of interest? I see apple 'ministores' everywhere here in Portugal inside retailers and that doesn't stop them selling tablets from Asus, Samsung, Sony, Acer... If the reason is Apple, I smell antitrust lawsuits. The timing is particularly suspicious, given recent stories about Kindle outselling every other Android tablet...

[EDIT]For clarification, what I mean by 'ministores' over here is Apple-only areas inside a retailer's premises, using Apple branding and trade dress. You still pay at the regular cashiers. That said, I still don't see a conflict of interest even if it's an actual Apple shop. Just a move to dislodge a competitor from the store altogether.

I was wondering about this. I keep an eye on the Kindle display when I'm at Target to see if the one that I want is on sale that week. It never is. That aside, I noticed a couple of weeks ago that the Kindle display was replaced with an iPad display and the Kindles have been put on an endcap touting a special deal when you buy one and a case for it.

Yeah, can't say that I get this one either. Granted, Apple products make higher margins and have a higher price point, so it may be Target not wanting to undercut a money-maker with a less expensive alternative.

To forestall the inevitable, I know that the two aren't equivalent alternatives.

What conflict of interest? I see apple 'ministores' everywhere here in Portugal inside retailers and that doesn't stop them selling tablets from Asus, Samsung, Sony, Acer... If the reason is Apple, I smell antitrust lawsuits. The timing is particularly suspicious, given recent stories about Kindle outselling every other Android tablet...

[EDIT]For clarification, what I mean by 'ministores' over here is Apple-only areas inside a retailer's premises, using Apple branding and trade dress. You still pay at the regular cashiers. That said, I still don't see a conflict of interest even if it's an actual Apple shop. Just a move to dislodge a competitor from the store altogether.

Probably a conflict of interest along the lines of "we don't want to help Amazon gain even more marketshare when they are putting us out of business". Understandable, Amazon is pretty much using the kindle (fire) as a gateway drug into the Amazon ecosystem. Kindle fire owners also get a free month of Amazon Prime -- so two day (and often one day) delivery, no shipping costs, and (in most places) no taxes.

Assuming that was an Apple request (which is a reasonable assumption), this is kind of thing that could get Apple in trouble if they every achieve monopoly status in that market (whatever that market is).

Yeah, can't say that I get this one either. Granted, Apple products make higher margins and have a higher price point, so it may be Target not wanting to undercut a money-maker with a less expensive alternative.

Apple products have a higher margin for Apple, that doesn't mean Target makes more selling an iPad. Cell carriers make less margin off of iPhones then other smart phones

What conflict of interest? I see apple 'ministores' everywhere here in Portugal inside retailers and that doesn't stop them selling tablets from Asus, Samsung, Sony, Acer... If the reason is Apple, I smell antitrust lawsuits. The timing is particularly suspicious, given recent stories about Kindle outselling every other Android tablet...

[EDIT]For clarification, what I mean by 'ministores' over here is Apple-only areas inside a retailer's premises, using Apple branding and trade dress. You still pay at the regular cashiers. That said, I still don't see a conflict of interest even if it's an actual Apple shop. Just a move to dislodge a competitor from the store altogether.

Probably a conflict of interest along the lines of "we don't want to help Amazon gain even more marketshare when they are putting us out of business". Understandable, Amazon is pretty much using the kindle (fire) as a gateway drug into the Amazon ecosystem. Kindle fire owners also get a free month of Amazon Prime -- so two day (and often one day) delivery, no shipping costs, and (in most places) no taxes.

That would be a conflict between Apple and Amazon, not Target and Amazon. This move, if actually caused by Apple, is reminiscent of Intel's tactics a few years ago of offering discounts to OEMs on bulk purchases of its CPUs... provided that they didn't sell any products with AMD CPUs. And that got them in trouble with the EC and the FTC.

If Apple were to buy Target, that would be another thing. But even then, banning a specific competitor in a multi-brand store would probably be seen as an abuse of market position...

I bought my Kindle, well 3 actually from Target. But i could really care less about this. I am sure the iPad has a higher profit margin because it is grossly overpriced. Probably more appealing to retailers to sell it.

The Kindle Fire does everything I would ever use an iPad for so I am very happy with the purchase, and I think Amazons business model for its devices is a smart way to grow its market share.

Now, an article on why The Verge is so eager to paint this one on Apple would be interesting. Target and Amazon are direct competitors...it seems more likely that would be the reason behind one dropping the other's products.

What conflict of interest? I see apple 'ministores' everywhere here in Portugal inside retailers and that doesn't stop them selling tablets from Asus, Samsung, Sony, Acer... If the reason is Apple, I smell antitrust lawsuits. The timing is particularly suspicious, given recent stories about Kindle outselling every other Android tablet...

[EDIT]For clarification, what I mean by 'ministores' over here is Apple-only areas inside a retailer's premises, using Apple branding and trade dress. You still pay at the regular cashiers. That said, I still don't see a conflict of interest even if it's an actual Apple shop. Just a move to dislodge a competitor from the store altogether.

Probably a conflict of interest along the lines of "we don't want to help Amazon gain even more marketshare when they are putting us out of business". Understandable, Amazon is pretty much using the kindle (fire) as a gateway drug into the Amazon ecosystem. Kindle fire owners also get a free month of Amazon Prime -- so two day (and often one day) delivery, no shipping costs, and (in most places) no taxes.

That would be a conflict between Apple and Amazon, not Target and Amazon. This move, if actually caused by Apple, is reminiscent of Intel's tactics a few years ago of offering discounts to OEMs on bulk purchases of its CPUs... provided that they didn't sell any products with AMD CPUs. And that got them in trouble with the EC and the FTC.

If Apple were to buy Target, that would be another thing. But even then, banning a specific competitor in a multi-brand store would probably be seen as an abuse of market position...

You're assuming it's about the iPad and Apple. The Verge may not be right. It could simply be Target trying to hold off Amazon as best they can. Target has been on record about Amazon cutting into their business with showrooming and such.

I love to dump on Apple almost as much as I love to buy from them (believe it or not), but the first thought coming to this Mind is books. Target still sells hardcopy books. With Amazon's recent win in the ebook pricing court battle circus, I'm thinking Target is feeling threatened on that front. Of course, Apple may have nudged a little..

Eh, nothing to see here. Companies can sell whatever products they want (or decline to sell items, as well).

True, but it Apple requested it, then it is illegal anti-competitive behavior.

Not necessary. "If you give us an exclusive we'll give you better pricing" is a fairly normal deal.

It may simply come down to the fact that sometimes stores need to trim their product lines; they can't carry everything of everything even in a huge store like Target. Target rarely carries a large selection of any kind of item. If Apple products offer better margins and gross profit while there is minimal or no loss in foot traffic, then to a store it makes sense to choose to keep Apple.

Besides, as others have said, Amazon is a threat to Target and Apple is not nor is Sony or B&N. If you have to trim someone, which one are you going to choose?

I love to dump on Apple almost as much as I love to buy from them (believe it or not), but the first thought coming to this Mind is books. Target still sells hardcopy books. With Amazon's recent win in the ebook pricing court battle circus, I'm thinking Target is feeling threatened on that front. Of course, Apple may have nudged a little..

Yeah, it goes well beyond books, too. Amazon sells DVDs, video games, TVs, toys, clothes, food, toilet paper, etc, etc. And Prime members are moving more and more of their purchases online to justify their fee. And Amazon is increasingly marketing Prime to Kindle users (I think the Fire comes with a free month now?). There are any number of reasons for Target to not want to support that.

Hopefully this is just Target deciding to distance themselves from Amazon on account of them being direct competitors, and does not involve Apple at all. Unfortunately for Apple, seeing how one of their management bigwigs is a former Target executive...it's really hard to paint this as coincidence. As long as they didn't go the Intel route and actually offer (in a manner which can be proven) pricing contingent upon getting rid of Amazon's products, they should be able to get away with it guilty or not. Still, it's hard to see this as anything but a little shady.

with the link between tablets and shopping, I wonder if tighter alliances between tech and retail will emerge. I do a lot of shopping on amazon, but at times it is nice to see a product in person. Among the national big box stores I'm envisioning alliances such as apple-target, microsoft-walmart, amazon-costco, and google-Sears/kmart (ebay probably fits in somewhere too). These match-ups are obviously just guesses, but it seems like retail is due for a shake up.

Eh, nothing to see here. Companies can sell whatever products they want (or decline to sell items, as well).

True, but it Apple requested it, then it is illegal anti-competitive behavior.

Not necessary. "If you give us an exclusive we'll give you better pricing" is a fairly normal deal.

It may simply come down to the fact that sometimes stores need to trim their product lines; they can't carry everything of everything even in a huge store like Target. Target rarely carries a large selection of any kind of item. If Apple products offer better margins and gross profit while there is minimal or no loss in foot traffic, then to a store it makes sense to choose to keep Apple.

Besides, as others have said, Amazon is a threat to Target and Apple is not nor is Sony or B&N. If you have to trim someone, which one are you going to choose?

In this case, "If you get rid of our competitor's product, we'll give you better pricing" would likely fall under the same situation as Intel/AMD did (where as others have mentioned, Intel offered signficantly better pricing as long as OEMs refused to sell AMD powered PCs). The outcome of that was Intel being forced to pay AMD $1.25 Billion.

Probably a conflict of interest along the lines of "we don't want to help Amazon gain even more marketshare when they are putting us out of business".

Yup. The Fire basically exists to sell more products through Amazon.com, with the side effect of denying those sales to Target. Frankly, I don't know why any retailer would want to sell the Kindle. Sure, you get the immediate sale, but it then screws you over from there on out.

Quote:

True, but it Apple requested it, then it is illegal anti-competitive behavior.

Uh, no. I work for a retailer. We negotiate vendor term agreements all the time. Apple can request whatever it wants, and Target can tell Apple to go fly a kite. It's not like the loss of a few electronics items would seriously cripple Target.

I love to dump on Apple almost as much as I love to buy from them (believe it or not), but the first thought coming to this Mind is books. Target still sells hardcopy books. With Amazon's recent win in the ebook pricing court battle circus, I'm thinking Target is feeling threatened on that front. Of course, Apple may have nudged a little..

Yeah, it goes well beyond books, too. Amazon sells DVDs, video games, TVs, toys, clothes, food, toilet paper, etc, etc. And Prime members are moving more and more of their purchases online to justify their fee. And Amazon is increasingly marketing Prime to Kindle users (I think the Fire comes with a free month now?). There are any number of reasons for Target to not want to support that.

Yeah. The moment Apple steps into the TP market, those iWhatevers are off Target's shelves!

You're assuming it's about the iPad and Apple. The Verge may not be right. It could simply be Target trying to hold off Amazon as best they can. Target has been on record about Amazon cutting into their business with showrooming and such.

Fair enough I ought to know better than to speak without knowing all of the facts. I assumed Target was essentially a hardware store, but I've since realized they sell other stuff that Amazon sells online.

So let me rephrase: if this was Target's choice to prevent its clients from going the Amazon way, then it's a stupid move. They're not stopping the move to online shopping by removing one product from the shelves. And if it has Apple's finger behind it (which seems less likely now), then I hope the authorities will release the antitrust hounds

So let me rephrase: if this was Target's choice to prevent its clients from going the Amazon way, then it's a stupid move. They're not stopping the move to online shopping by removing one product from the shelves.

Yeah, but there's a difference between "not stopping" and "actively helping". If I was a Target stockholder, I'd definitely question why they are carrying a product that is quite bluntly designed to take away future sales from Target. Now if Target demanded that Amazon include a Target shopping app right next to Amazon's shopping app on the Fire, that might be a bit better for them (and Amazon would be nuts to agree to such a term).

Quote:

And if it has Apple's finger behind it (which seems less likely now), then I hope the authorities will release the antitrust hounds

I really don't get why people think this is even remotely an anti-trust issue. Target sells thousands upon thousands of items. There is literally NO chance that Apple could strong arm them into removing all their competition. Do people seriously think that Target would be seriously damaged if Apple up and removed all of its products from their shelves? They probably represent a fraction of one percent of their sales. They'd just throw some other electronic devices in the spot.

Assuming that was an Apple request (which is a reasonable assumption), this is kind of thing that could get Apple in trouble if they every achieve monopoly status in that market (whatever that market is).

If they suddenly dissapear from bestbuy, Walmart, and other places iPads are also sold, i might believe this story. MUCH more likely however is that Target has gobs and gobs of Kindle Fire inventory lying around unsold.

Amazon reports "sold" as shipped, as do most other manufacturers. It has been touting massive "sales" numbers, but sellthrough has in fact been limited. It is more likely Target is choosing to discontinue the brand because it can use the shelf space in their (rediculously small) technology area for products that both sell and have higher margin (another issue with Fire, target makes a very small margin on them).

Edit: And as others pointed out, Amazon is also the elephant in the room, Target's #1 competition. Hindering their customer's accaptance/access to Amazon branded things is a move the shareholders are sure to like...

Not to pile on, but why was Apple even mentioned. There is enough product overlap between Target and Amazon, that Target might not want to carry a competitors storefront. In fact, when I read the headline that was my first thought. Apple likes to impose its retail practices on its partners/competitors, but to assume Apple has a hand in everything is giving them more credit then is due. In this case Apple's imposition may just be lazy reporting and spurious assumptions.

Eh, nothing to see here. Companies can sell whatever products they want (or decline to sell items, as well).

True, but it Apple requested it, then it is illegal anti-competitive behavior.

Not necessary. "If you give us an exclusive we'll give you better pricing" is a fairly normal deal.

It may simply come down to the fact that sometimes stores need to trim their product lines; they can't carry everything of everything even in a huge store like Target. Target rarely carries a large selection of any kind of item. If Apple products offer better margins and gross profit while there is minimal or no loss in foot traffic, then to a store it makes sense to choose to keep Apple.

Besides, as others have said, Amazon is a threat to Target and Apple is not nor is Sony or B&N. If you have to trim someone, which one are you going to choose?

In this case, "If you get rid of our competitor's product, we'll give you better pricing" would likely fall under the same situation as Intel/AMD did (where as others have mentioned, Intel offered signficantly better pricing as long as OEMs refused to sell AMD powered PCs). The outcome of that was Intel being forced to pay AMD $1.25 Billion.

Even if it did fall into that, Intel was a legal Duopoly, Apple is not. Antitrust regulations, and the Sherman Act, only apply to those who are a monopoly, or duopoly, in an entire market (not product category even). Apple is not even CLOSE to a monopoly. When one is not a monopoly, such agreements are PERFECTLY LEGAL and not considered anticompetitive.

However, as others pointed out, there's a) no proof apple was involved at all, this is entirely speculation, and b) it;s likely wrong, as Target's own interests are much more likely due to the fact that Amazon is it;s OWN biggest competitor, and why would you carry your competitors product, especially when the margin is so tiny, and where that product is quite literally designed to help you buy things from Amazon instead of Target going forward?

Not to pile on, but why was Apple even mentioned. There is enough product overlap between Target and Amazon, that Target might not want to carry a competitors storefront. In fact, when I read the headline that was my first thought. Apple likes to impose its retail practices on its partners/competitors, but to assume Apple has a hand in everything is giving them more credit then is due. In this case Apple's imposition may just be lazy reporting and spurious assumptions.

Agreed. I thin at most ity may have been apple putting a buzz in some shareholder's ear: "Hey, btw, why are you carrying your direct competitor's product on your self anyway? For each Kindle sold, how many sales of books, DVDs, etc aer you losing to Amazon?" It's not exactly a suggestion to remove them, it;s pointing out they're morons not to. And who actually said apple even did that? It;s speculation.

Hopefully this is just Target deciding to distance themselves from Amazon on account of them being direct competitors, and does not involve Apple at all. Unfortunately for Apple, seeing how one of their management bigwigs is a former Target executive...it's really hard to paint this as coincidence. As long as they didn't go the Intel route and actually offer (in a manner which can be proven) pricing contingent upon getting rid of Amazon's products, they should be able to get away with it guilty or not. Still, it's hard to see this as anything but a little shady.

I presume the "bigwig" you're talking about is Ron Johnson. He's no longer with Apple. His current job is saving JC Penny.

As a few others have mentioned I suspect that this is due to Target/Amazon rivalry rather than Apple nefariously influencing Target at the expense of Amazon.

Personally I hate shopping in these giant warehouses (no, I do not want an extended warranty nor pay you 30 quid for a simple HDMI cable...), and conversely appreciate the simple and efficient Amazon experience. Looks like a dinosaur lashing out at the agile newcomer to me...

I looked at the memo from the first link, and nowhere does it say conflict of interest. all i see is

Quote:

It appears that's about to change, however, with a source telling us that the company is going to stop carrying the line of products due to a "conflict of interest."

so a 'source' said this?

now i dont read the 'verge' but how accurate are their 'sources' most of the time?

A "conflict of interest" for Target, is AMAZON ITSELF. They have spoken many times about amazon cutting into their biz, and they are clearly not just a direct competitor, likely their biggest one. Carrying a device that's not only putting profits in your competitors pocket is by itself a conflict of interest, but more over, the fire is quite literally designed to help its users use Amazon even more for other purchases. This was not the case fot the original kindle years ago, and amazon was not so agressive years ago. Target likely wanted rid of the kindle just to shake association with Amazon period, regardless of what apple may or may not have wanted (and apple mini stoers exist all over the world, and in Walmart, bestBuy, and more here, and THEY all carry the Kindle still).