Target to stop selling Amazon's Kindle devices

Amazon CEO Jeff Bezos holds up the new Kindle Fire at a news conference during the launch of Amazon's new tablets in New York, September 28, 2011.

REUTERS - Target Corp (TGT.N) said on Wednesday it will stop selling Amazon.com Inc's (AMZN.O) Kindle devices, the latest in a series of brawls between the companies fueled by Amazon's increasing competition with brick and mortar retailers.

"Target is phasing out Amazon- and Kindle-branded products in the spring of 2012," Target spokeswoman Molly Snyder wrote in an email to Reuters. "We will continue to offer our guests a full assortment of e-readers and supporting accessories."

The decision includes Amazon's new Kindle Fire tablet, its range of Kindle e-readers and all accessories for the devices, including covers and chargers. Target will still sell other e-readers and tablets, including the Nook from Barnes & Noble (BKS.N), Snyder added.

"This is evidence that Target is getting more serious about Amazon as an enemy rather than a partner," said Matt Nemer, an analyst at Wells Fargo.

Amazon ran Target's website for several years, but that relationship ended last year amid a legal battle.

"That's probably something Target now regrets," Nemer said. "It put them behind in the world of multi-channel retail and let a serious competitor learn a lot about their business."

Wal-Mart Stores (WMT.N), the world's largest retailer, will keep selling Kindles, a spokeswoman said on Wednesday. An Amazon spokeswoman did not respond to requests for comment.

Target's move comes as the retailer outfits some of its stores with special displays of Apple Inc (AAPL.O) products, including the iPad, which competes with Amazon's Kindle Fire tablet.

Amazon's Kindle Fire is tightly integrated with the company's huge online retail store, which competes with Target's physical big-box outlets and its website.

"Target is trying to distance themselves from Amazon as much as possible because they recognize they are losing sales to them," said Scott Tilghman, an analyst at Caris & Co.

Target is still selling the Nook because Barnes & Noble is mainly focused on selling books, which are not an important product category for Target, he added.

In contrast, everything sold in a Target store, such as apparel, home goods and consumer products, is also offered by Amazon, Tilghman noted.

"Nook is much less cannibalistic and Barnes & Noble is not going after Target's business," he said.

Target's Snyder said the company "continually evaluates its product assortment to deliver the best quality and prices for our guests."

She declined to comment on whether closer merchandising ties with Apple or broader competition with Amazon were behind the move to stop selling Kindles.

Amazon shares were down 89 cents at $229.15 in Wednesday afternoon trading, while Target shares slipped 40 cents to $57.61.

Target's move is not a big problem for Amazon because other retailers are still selling Kindles, Tilghman said. On Wednesday afternoon, Best Buy Co (BBY.N) and RadioShack Corp (RSH.N) still listed Kindles for sale on their websites.

Still, the spat with Target highlights that while Amazon seeks to work with retailers and provide the sector with e-commerce services, it also competes with those companies.

"Amazon will continue to partner with retailers, but the focus will be on the e-commerce side," Tilghman said. "For every Target, there are many smaller retailers that don't have the deep pockets to build their own e-commerce business."

Tech blog The Verge reported Target's decision to stop selling Kindles earlier on Wednesday.

(Editing by Gerald E. McCormick, Maureen Bavdek and Phil Berlowitz)