Toys 'R' Us Takes On Amazon With 'Tabeo' - Tablet For Kids

Toys ''R'' Us Inc. will release a $149.99 tablet designed for children in time for the holiday shopping season. Coming less than a week after Amazon.com Inc. (Nasdaq: AMZN) announced an expanded list of competitively priced tablets, the toy retailer's plan appears designed to take on its chief competitor in online retail.

Troy Peterson, vice president and divisional merchandise manager of the Wayne, N.J., company said Monday in a statement that the tabeo comes from a year's worth of conversations with "parents and children to determine what features and functions they really want in a kids' tablet."

Cheaper than many other tablets on the market and designed for use by children, he added that the tabeo "offers robust and flexible parental controls that can help protect children as they surf the Internet." The new tablet will also feature its own App Store similar to the Apple App Store, Android smartphones' Google Play or Kindle's Amazon services. Unlike those services, however, the tabeo App Store will feature "only kid-safe content carefully curated by the Toys "R" Us team."

The tabeo will have 50 free game applications such as the ever-popular mobile game "Angry Birds" in its starting lineup, and the app store will include some 7,000 additional titles.

Toys "R" Us, a privately held American retailer, has remained financially viable in recent years amid fierce competition from larger competitors like Wal-Mart Stores Inc. (NYSE: WMT) and Amazon largely by adjusting its business model to accommodate shifts away from in-store purchases and the looming threat of "showrooming" -- where shoppers inspect items in a physical store, only to purchase them online more cheaply later. It first launched its website, Toysrus.com, as far back as 1998. In 2009, the company purchased two other prominent online toy sellers, eToys.com and Toys.com to expand its online operations. By April 2011, Toys "R" Us was boasting strong increases in its online sales figures, and even announced plans to open its own e-commerce fulfillment and distribution centers.

More recently, however, things have not been looking up for the toy giant. First filing to go public over two years ago in May 2010, the company has still not come forward with an initial public offering, casting doubt on its prospects against rivals both on the web and in traditional big-box retail.

Seeing the recent success of kid-specific tablets like Kurio 7, Meep and Lexibook, Toys "R" Us apparently aims to reverse its fortunes by embrace technology not only in expanding its e-commerce alternatives, but by offering unique gadgets to children. Speaking to the Wall Street Journal, Peterson said "it is our strategic position to offer products that you can't find anywhere (else) or be compared on price."

The tabeo will be released on Oct. 21 for $149.99.