Walmart, Toys 'R' Us, Other Retailers Fight Rough in Tablet Battle

Major Retailers Kick Amazon to the Curb; Toy Store Boots One Supplier, Adds Proprietary Tech

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As the tablet wars ratchet up for the holiday season, mass merchants are kicking the competition off the shelf.

Walmart is dropping Amazon Kindle (and all Amazon products). That follows Target 's spring dismissal of Amazon and its Kindle as the online brand becomes ever-more competitive. Now, Toys "R" Us, encouraged by the hot-selling children's tablet it sold exclusively last year, is introducing its own branded tablet and ditching Nabi -- leaving the next-generation Nabi 2 to be sold by Amazon, Best Buy, Target and Walmart.

Confused? Well, consumers might be as well. But there's a reason for all the tumult in tablets: They are a sure thing in an otherwise uncertain market. According to the Consumer Electronics Association, tablets are expected to reach $29.1 billion in shipment revenue this year, $10.8 billion more than forecasted in January, and representing a blistering 83% in year-over-year sales growth. Unit sales are expected to reach 68.5 million in the U.S. 

With that much at stake, analysts said giving Amazon retail shelf space is tantamount to giving the competition an in. "It's baffling to me that every retailer hasn't booted Amazon from their store floors," said Sucharita Mulpuru, an analyst with Forrester Research. "Behind closed doors [retailers say] Amazon is like a locust in the field. It's this pest that 's destroying margins and making everyone's life difficult."

For now, Best Buy, Staples, RadioShack and others will still sell the Kindle devices. But as Ms. Mulpuru said, "You can bet Walmart's decision is causing conversations to happen in Minneapolis," Best Buy's headquarters.

Next month Toys "R" Us will start selling Tabeo, its own branded tablet for children. It will join other brands, such as the Kurio, Meep and Lexibook, the retailer added after last holiday's exclusive deal expired. The plan, said Troy Peterson, VP-divisional merchandise manager, is to create a "destination marketplace" for kids' tablets. But for reasons neither party would divulge, the destination will no longer include Nabi. That's a plum account lost by the brand's manufacturer, Fuhu.

"With Walmart, Best Buy and GameStop behind the Nabi 2 ... we believe it will fare very well this holiday season," said a Nabi spokeswoman in an email.

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