Toys R Us launching kids' tablet computer

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Toys R Us said Monday that it plans to launch its own tablet computer aimed at children on Oct. 21.

The computer, called Tabeo, will be a low-priced entry, at $149.99, in the increasingly crowded tablet business.

The news comes ahead of the holiday season, which can account for up to 40 percent of retailers' annual sales. Toys R Us has focused on exclusive toys rather than discounts as it faces tough competition from online retailers like Amazon.com and discounters like Wal-Mart Stores Inc.

The 7-inch touch-screen tablet comes with 50 preinstalled apps selected for children, including games such as Angry Birds and Fruit Ninja, and a book app called istorybooks. It will be equipped with Wi-Fi and run on Google Inc.'s Android 4.0 operating system.

Toys R Us sells other electronics including Apple Inc.'s iPad, but this is its first store-brand tablet. The Tabeo's main competitors include LeapFrog Enterprises Inc.'s LeapPad, one of the biggest hits last holiday season, and VTech Holdings Ltd.'s similar InnoTab.

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Toys R Us, a privately held retailer, reported in its quarter ended July 28 that its net loss widened slightly from a year ago, hurt by weakness in Europe and a decline in video game sales.

Tabeo's announcement hurt shares of LeapFrog, which fell 8.74 percent, to $8.35 in trading Monday. The stock is still up almost 50 percent since the beginning of the year.

Children's tablets are increasingly popular. In addition to the LeapPad and the InnoTab, other children's tablets include the Kurio Kids Tablet from TechnoSource and the Meep Kids Tablet from Oregon Scientific, both matching the Tabeo's $149.99 price tag.

Needham & Co. analyst Sean McGowan said it is hard to say how a new kid-oriented tablet will fare since the market is so new, although LeapFrog's LeapPad proved popular last holiday.

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