Apple's evolving model as a content reseller allows them significant latitude in upfront pricing. When you're taking a 30% cut of all digital content purchased

Apple's evolving model as a content reseller allows them significant latitude in upfront pricing. When you're taking a 30% cut of all digital content purchased on the device you can afford to have slimmer margins on the device as it goes out the door as compared to competitors that retain little ongoing revenue. This dynamic is exactly why you've seen the Kindle drop in price so much since release.