A dedicated eReader has less pressure to keep upgrading the components. The current kindle doesn't need much improvement; the CPU is adequate, RAM is adequate,

A dedicated eReader has less pressure to keep upgrading the components. The current kindle doesn't need much improvement; the CPU is adequate, RAM is adequate, flash storage is adequate. The screen could use a little bit of improvement in contrast, # of gray shades, and refresh speed. The point being, it's pretty close to stabilizing, at which point Amazon can just keep dropping the price as components get cheaper. Then Amazon can sell more and more of them, and sell more and more Amazon ebooks. If the Kindle's cost falls enough, Amazon can give them away. By contrast, general-purpose tablets are going to be under constant pressure to keep upgrading the components, with faster CPUs, more RAM, better color screens, new wireless tech, better GPUs, more storage, so that users can use the latest software and run the latest apps. That'll help keep the prices relatively high. If you think of dedicated eReaders, or at least the Kindle, as being like a simple 4-function calculator, it might be clearer. Calculators like that used to be expensive way back when. Now they're cheap enough to give away free with magazine subscriptions. There's little point in upgrading the hardware, so they just get cheaper and cheaper.