Amazon Introduces Tablet That Undercuts iPad’s Price - NYTimes.com
Because Amazon sells its family of Kindle devices through its own Web site, it does not need to share revenue with another retailer. And in most states, customers do not have to pay sales tax on those devices.
The original Kindle was meant to remove the retailer’s reliance on the physical book at a moment when a successful e-reader appeared inevitable. Amazon decided it was better to cannibalize its own future than let a competitor do it.