For Amazon & Kindle, brick & mortar stores key to success

When it comes to tablets, it has so far been a one-tablet show. Apple’s (s AAPL) iPad has been and continues to be the dominant player. Amazon’s (s AMZN) Kindle Fire is being considered a legitimate contender and if Amazon’s spin is to be believed, the company is experiencing better than expected demand. There have been rumors of higher production numbersThere is incredible buzz for the product. But as they say, products are not sold in factories but in stores.
With a massive online presence, Amazon doesn’t have to worry about selling Kindles on the Internet. However, it is making sure that it gets the Kindles in as many brick-and-mortar stores as possible. The company says that all four Kindles are going to be sold in 16,000 brick and mortar retail stores across the US including those owned by Walmart (s wmt) , Target (s tgt), Sam’s Club, Office Depot (s odp), Best Buy (s bby), Staples (s spls) and RadioShack (s rsh). “We believe the additional sales channel is an incremental positive,” notes Brian Pitz, analyst with UBS Research in a note to his clients this morning.
You can say that again. I think this is a net negative for most other tablet makers, since Amazon is essentially flooding the market. This holiday season, Kindles and Kindle Fires are going to be ubiquitous and that is going to make a crucial difference between Kindle Fire and almost any other tablet that is not made by Apple. Barnes & Noble (s bks) is also planning to retail its new Nook Tablet at Best Buy, Target, Walmart, RadioShack, OfficeMax, Staples in addition to sales at its Barnes & Noble stores. Tablet competitors are going to need wide brick-and-mortar distribution to compete this holiday season.
Amazon’s new Kindle lineup includes Kindle ($79), Kindle Touch ($99), Kindle 3G ($149), and the color Kindle Fire ($199). UBS Research estimates that during the holiday quarter Amazon will sell 8.5 million Kindles, including 5 million Kindle Fires. For 2012, they expect Amazon to sell 22 million Kindle devices. And a ChangeWave survey of early adopters found that 5 percent have pre-ordered or are very likely to buy a Kindle Fire.