does this tablet is coming without camera and other wireless interfaces or it is designed with some lower features. Looking forward to see the complete tear down and comparision with play book. Certaily ti is gaining a good traction now.
well, i calculate the profit margin other way: Amazon is making 50USD for 150USD i.e. 1/3rd profit. Now if Apple is making $200 for $300 then its 2/3rd profit....so kindle is making half the profit of what Apple is making...Dollar of Dollar. Remember that Apple's products are usually high profit margin.
I think Amazon is betting on the volume for Kindle fire. With the price tag set at $199, it is expected to be sold in large volume. People who are hesitate at shelling out $500 on an iPad but need a handy tab (like me :)), will definitely think about buying it. Though I don't think iPad is going to give-up market share to Kindle Fire as the features doesn't compare "apple to apple" and the people who wants to get an iPad will still buy it. Kindle Fire seems to have a good potential to dominate the low cost markets.
Now imagine if they start a movie/music subscriptiion like Apple does then they would give stiff competition. Hadrware is the key enabler but the profits lie in software services. So they appear to have got the equation right.
The hardware profitability may be low but I think that key is that the tablet brings the Amazon store-front, which we usually access on a PC, to the tablet screen. That should be the main target of profit instead of the hardware.
Amazon is not directly competing w/ Apple on the hardware-feature front but more on its price and Amazon's broad service and catalog.