I wouldn't be surprised if we see a sub $100 Kindle eventually. I'd bet we'll see one before a sub-$400 iPad (and no, $399 doesn't count). And yeah, I agree that at that price they could sell like crazy.

Tom, I find that split of the teams interesting too. On the store-team side, they've decided to get on as many devices as possible, and that's been a great tactic. On the hardware side, they're improving the devices while getting the price down, and now they're going to sell them in Best Buy, which I think is huge for them. I can't imagine someone looking at the Kindle 3 next to the Nook and the Sony readers and deciding to go with the latter two, especially considering it's cheaper.

I'm not surprised that the iPad is hurting their sales, but I also think that the current market is going to even out, and as the price drops the market will grow. I think the evening out is coming from many people who bought the iPad instead of a Kindle, but are now getting the inexpensive Kindle for the uses that Tom mentions.