Profit margins on the Kindle must be huge. The hardware can't cost much more than the PRS-505 and Amazon is selling direct.
We won't really know what Amazon will do with AZW until they start selling outside the US. My guess is that a non-US Kindle won't be able to buy US AZW's and a US Kindle won't be able to buy non-US AZW's. However, at that point Amazon may let both read secure MOBI, since MobiPocket seems to have worldwide rights to its titles.
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