The true brilliance of Amazon's move is that you no longer need a Kindle anymore to read current bestsellers in e-book form. Amazon, like thousands of businesses before it (see also: iTunes store, console games), has shifted into selling the razor blades, not the razors.
Those $10 downloadable books—800K software files, with no physical material costs, shipping costs or warehousing costs—are surely where the profit is. In other words, Amazon, having ignited new interest in the whole e-book concept with its $360 Kindle reader, is already steering itself from hardware back to software, to e-books as a service, to the skills where it already excels.
Amazon's Kindle Move Away from Kindle Device
David Pogue on Amazon's returning to its core software strength, by making Kindle books available on the iPhone -- obviating the need to own a Kindle to read Kindle books: