What's missing from your calculations, bobl, is that these readers use
e-ink screens, which are
not a fully mature technology, manufacturingwise and which are currently being manufactured by one, single company.
Someone over in the iRex iLiad forum recently broke his screen and iRex quoted him $343 to replace it. That is apparently right in line for actual cost. My estimate on the 6" screen that the Sony uses is roughly 1/2 the surface area of the iLiad's 8" one and only 4 shades of gray to the iLiad's 16 -- that's why I said $150 to $200. You could claim $100~$150 and I wouldn't argue the point, but it's still too high for your $25 range.
The folks over at the
Baen Bar (
NOT Baen publishing, just folks who hang out on their forum) are working on designing their own reader. Unfortunately, the company that makes the e-ink displays NDA'd them, so they can't say exactly which costs what, but they did say that if they bought all the components themselves from other sources, and the e-ink displays from PVI (the company that makes them), and did all the assembly work themselves, the cost would be around $300 per unit (that's for ~1000 units, and there's no volume price break on this side of 10,000 displays). That's
without a profit margin, cause they're basically trying to make the readers themselves for themselves. They're currently looking at other display types to see if they can find anything that compares to e-ink, for a lower cost.
So while I haven't seen a B.O.M., I stand by my guess as being fairly informed.
You mentioned the $100 laptop -- the Baen folks looked at it and discussed it some, and the general consensus there was that it just wasn't suitable for a reader.