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AT&T to Start Selling Amazon’s Kindle E-Reader Next Month

The Kindle accounted for 5 percent of Amazon's revenue in 2010, according to analyst Aaron Kessler. Source: Amazon via Bloomberg
The Kindle accounted for 5 percent of Amazon's revenue in 2010, according to analyst Aaron Kessler. Source: Amazon via Bloomberg

Feb. 28 (Bloomberg) -- AT&T Inc., the second-largest U.S. wireless carrier, will begin selling Amazon.com Inc.’s Kindle electronic reader in its 2,200 stores next month, aiming to boost revenue by luring more users to its network.

As the exclusive provider of wireless service for the Kindle in the U.S., AT&T will offer the device beginning March 6 for $189, the same price charged by Amazon. Dallas-based AT&T won’t sell the cheaper Wi-Fi only version of the Kindle.

AT&T is promoting tablets, such as the Apple Inc. iPad, to generate revenue from sources other than mobile-phone contracts. The carrier may collect $3 to $4 a month from Seattle-based Amazon per each Kindle connected to its network, estimates Philip Cusick, a JPMorgan & Chase Co. analyst in New York.

“We believe we should have in our stores devices that we connect, whether it has our brand on it or not,” Glenn Lurie, AT&T’s emerging device president, said in an interview. “We think we’ll sell a few; it helps Amazon, it helps us.”

The Kindle accounted for 5 percent of Amazon’s revenue in 2010, according to Aaron Kessler, an analyst at ThinkEquity LLC. The company may have sold more than 8 million of the devices in 2010, two people familiar with the matter said in December. Amazon doesn’t disclose Kindle sales.

Lurie declined to discuss terms of its agreement with Amazon, including whether AT&T would make money from the sale of the Kindle or how much revenue a connection generates.

AT&T is also the exclusive U.S. network provider for the Barnes & Noble Inc. Nook and Sony Corp. Reader.

Amazon fell $3.95, or 2.2 percent, to $173.29 at 4 p.m. New York time in Nasdaq Stock Market trading. AT&T added 25 cents to $28.38 on the New York Stock Exchange.

To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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