Amazon is using the “razor” business model. Y’know, give you the razor either cheap or free, so they can sell you their proprietary blades. Amazon is selling these devices at cost or slightly below so they can sell you their content. the devices are just a delivery system.
CC
I remember Bezos saying several years ago that he would love to see the day when Amazon would just give away Kindles just for the reason you mentioned. The Kindle reading app is free for any and all devices, including the iPad, so you can read Kindle books however you can get to a reading device.
And it’s a fantastic business model for them. They store digital data, a fairly cheap prospect when a 300 page book is less that 1MB, and they earn money whenever someone buys a right for that particular file.
They don’t have to create anything, just store (and backup) the data. No warehouses, no shipping fees, no stocking analysis. Just sell a product that is always available and takes up microscopic shelf space.