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LeapFrog shares tumble after Toys R Us tablet news

NEW YORK (AP) — Shares of educational toy maker LeapFrog Enterprises Inc. fell Monday, after Toys R Us announced plans to launch its own tablet computer aimed at children next month.

THE SPARK: The privately held Wayne, N.J.-based toy retailer said it will begin selling the Tabeo, a low-priced entry into the increasingly crowded tablet business, on Oct. 21. It's expected to compete with both LeapFrog's LeapPad and VTech's InnoTab.

THE BIG PICTURE: 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 touchscreen 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 retail for $149.99 and runs on Google Inc.'s Android operating system.

The news comes ahead of the holiday season, which can account for up to 40 percent of retailers' annual sales.

THE SHARES: LeapFrog fell 54 cents, or 5.4 percent, to $8.61 in heavy morning trading, after dropping as low as $8.18 earlier in the day. Over the past 52 weeks, the Emeryville, Calif.-based company's shares have traded between $2.97 and $12.28.

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