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1. The cost of manufacturing is not the cost to produce.
2. Amazon has to walk a line with publishers. It wants access to books and it wants conversions. If publishers are nervous about how users might use pdfs they may have pressured Amazon into less than full use of the features. The Sony is inherently crippled by its size. irex doesn't have to worry about its relationships with publishers.
Amazon's managers are not stupid. They don't want the Kindle to be expensive and they do want it to be ubiquitous. Look what happened with the music industry - we are still in the incipient stages of digitizing books.
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