This is not a bad position to be in. Another HN comment said it best: Amazon is the one company who can afford to sell products at a loss, since they can potent

This is not a bad position to be in. Another HN comment said it best: Amazon is the one company who can afford to sell products at a loss, since they can potentially recuperate on content sales. I'll also agree with the Amazon "Kindle Color DX" theory you put forward here. They'll cross-subsidize entry tablet costs with a higher-end model. Aside: does Apple do the same with the iPad? I imagine they don't make a lot on 16GB models; instead, I assume they make lots of money by up-selling $4-8 in flash memory for $100 per module.