I see from other comments that this may not be true, but if it isn't, I'd advise that Amazon should start doing it as soon as they can. It would be an application of the "Gilette model" of sales -- sell the razor, or the printer, or the video-game console cheap, and make your money back on selling blades, cartridges, or cartridges respectively.

For a book-delivery platform like the Kindle, this strikes me as a natural model -- a user is likely to buy a large number of books over his lifetime, and the margin of profit on a $10 e-book makes the margin of profit on a music CD look humble.

There's also the point that the Kindle is not an obviously useful sort of device. Making it widely available will overcome customer reluctance to try it out it, ensuring that it either proves its worth and spreads quickly, or proves its worthlessness and fails quickly, and minimizes the amount of time that Amazon spends in new-product limbo either way.