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It was reported on teleread a little while ago that Amazon lose money everytime they sell a $9.99 ebook because the publishers cost is around $12.
They are taking this dangerous path because they believe they can make it work. So far its working ok charging extra money for the hardware and losing money on the software but thats not the way things are shaping up with media providers(pay tv etc) wanting to lock you into monthly contracts and providing the hardware cheaply.
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