Why did Target boot Amazon's Kindle?May 2, 2012: 12:10 PM ET
It's not clear why Target decided to no longer carry Amazon's e-reader, but it may have simply come down to a choice between Amazon and Apple.
FORTUNE -- Last night, The Verge reported that Target (TGT) was dropping Amazon's (AMZN) Kindle e-readers from its inventory because of what an unnamed source said was a "conflict of interest." That sounded intriguing because, of course, everyone guessed that Apple (AAPL) must have put the arm on Target. Apple is planning to open mini-stores in 25 Target stores this year, and Apple and Amazon are bitter rivals.
This morning, Target issued a terse statement declaring that it had simply evaluated its product mix and decided that Kindle no longer belonged. "We will continue to offer our guests a full assortment of e-readers and supporting accessories including the Nook," the statement read, referring to Barnes & Noble's (BKS) competing e-reader.
Well, not so full anymore. It's quite possible that Target is getting rid of the Kindle to appease Apple, though "conflict of interest" is an odd way to put it. If that's the case, isn't it also a "conflict" for Target to continue carrying the Nook? And for that matter, isn't it a conflict for it to carry Pepsi as well as Coke?
If Target did make the decision in an effort to mollify Apple, that would be sort of a retro-chic move in an era when big retailers tend to dictate terms to manufacturers rather than the other way around. There aren't many manufacturers with market power like Apple's, however.
Amazon's Kindle and Apple's iPad don't compete directly with each other. The Kindle is much cheaper, for one thing. But they do compete in terms of e-books, and that has become a flash point in recent weeks. The Department of Justice announced last month that it had filed an antitrust lawsuit against Apple and six publishers, accusing them of colluding on pricing. Apple denied the accusation and said the launch in 2010 of the iBookstore was aimed at breaking Amazon's "monopolistic grip" on the e-book market.
Meanwhile, Target can't be too pleased with Amazon's rather brazen policy of undercutting the prices of traditional retailers. Though the Kindle was Target's top-selling e-reader on Black Friday last year, the retailer clearly believes that if it must choose, Apple is the choice to make.