Consumer wins: Best Buy and other retail moves, Amazon Kindles, Sprint acquisition talks

As tech-related competition heats up among big U.S. companies, here are a few examples of how consumers are benefiting or could benefit:

• Best Buy, the electronics retailer that like other stores is struggling amid the rise of showrooming (the growing practice of going to a store to touch and see a product, then buying it online for cheaper), is fighting back. The Wall Street Journal reports that the Minnesota-based company is planning to match online competitors’ prices. The number of people who showroom at Best Buy “is a factor. It is material,” company executive Bill Hoffman tells the WSJ.

Another giant retailer, Wal-Mart, is hoping to boost its competitive advantage. It reportedly has begun to test same-day delivery of online purchases on the East Coast, with the service scheduled to expand to the Bay Area as early as later this month.

Best Buy and Wal-Mart have a big common rival: Amazon.com, which often offers lower prices partly because it does not collect sales taxes in many states. But Amazon has reached deals with some states, including California, where it recently began to collect sales taxes.

Wal-Mart last month announced that it would stop selling Amazon’s Kindle e-reader at its stores. (See Amazon’s tangled web: Wal-Mart’s Kindle dumping and more.)

• Speaking of Amazon, CEO Jeff Bezos told the BBC the Seattle company doesn’t make money from its hardware, which includes Kindle e-readers and Kindle Fire tablets.

“We want to make money when people use our devices, not when people buy our devices,” Bezos said.

Analysts have said Amazon’s tablets, which are cheaper than Apple’s iPad, are a “legitimate” competitor to that popular tablet, and others. (See The Apple vs. Amazon story: e-books, tablets.) The BBC points out that Apple and Android tablet makers rely on profit from their hardware sales. But Amazon is relying on its wide-ranging platform, which includes books, music, movies and more, to rake in the cash.

Great deal for those who want a cheaper tablet, right? It comes with a caveat: Amazon does everything it can to keep its customers loyal. For example, its Kindle Lending Library is tied to its Prime shipping service. “Prime does lock you into its platform,” Colin Gillis of BCG Partners tells the BBC.

• Finally, a development with the potential to benefit wireless consumers: the proposed acquisition of No. 3 U.S. wireless provider Sprint Nextel. As Bloomberg reports, if Japan’s Softbank buys a majority stake in Sprint, it would give the Kansas company the cash it needs to build out and/or boost its network, and compete more fiercely with Nos. 1 and 2 Verizon and AT&T, which reportedly control 75 percent of the nation’s wireless subscribers.

Sprint shares rose sharply Thursday on news of the talks; they are off slightly today. The proposed deal is reportedly worth $12.8 billion.

 

Tags: , , , , , , , , , , , , , , , , ,

 

Share this Post



 
 
 
  • geocatherder

    I admit to being an Amazon Prime junkie. The utterly reliable second-day service is delightful, and it even works when I’m vacationing back-of-beyond. Transferring book purchases to my new computer and to my Kindle reader was effortless. Plus, when buying things like electronics, I’ve found the technical descriptions to be at least as useful as what some overworked clerk at Big Box is going to be able to tell me.

  • sd

    The Best Buy price-matching is almost pointless. It applies only to appliances and electronics, not to tech or media. The fine print says “selected” competitors. And it must be requested of and accepted at the discretion of the BBUY employee on the sales floor. With their special product model numbers that disinvite such comparison to start with.

    It makes nice press, but there are enough holes in the fine print to drive a semi through.

 
 
css.php