Is it possible that Amazon is pricing the Kindle Fire at a loss because they are anticipating lower production costs in the future?
Right now, estimates put Amazon’s loses at around $10 per Kindle Fire. I’m sure with time, production costs can be lowered by $10 or more. Look at the prices of Kindles or iPods for the last few years and you’ll see the trend. The more that are manufactured, the lowered the cost because parts become cheaper as millions upon millions are ordered or a new manufacturing technique is created.
Perhaps Amazon is willing to lose a little money with each Kindle Fire sold to, with time, settle into a place where they are making money with each Kindle Fire sold.