Analyst’s read on Kindle competition prompts cut to Amazon’s stock rating

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Analyst downgrades Amazon with eye on Kindle

SEATTLE — Amazon.com Inc.’s Kindle e-book reader has so far been the best-selling gadget of its kind, but an analyst wrote Monday that mounting competition from Apple Inc. and Google Inc. might weigh on the Web retailer’s Kindle-related growth.

THE OPINION: Susquehanna analyst Marianne Wolk cut her rating on the Web retailer to “Neutral,” writing in a research note that Apple’s full-color iPad and linked e-book store have already started taking market share from Amazon.

Amazon also recently cut the Kindle’s price again, which will hurt profitability. The retailer trimmed the Kindle’s price tag by $70 to $189, after Barnes & Noble Inc. made a similar price cut on its Nook e-reader.

Wolk said she also sees competition from the forthcoming Google Editions, which the analyst said will sell e-books for reading with a Web browser.

THE STOCK: Shares of Amazon dropped $3.29, or 2.7 percent, to $117.71 in afternoon trading.