One more time, this fire sale teaches us that if Apple (the undisputed leader of this market) sells the iPad at $499 you have to give more for less to compete! (IMHO)
So far no one did it and the results are pretty visible.
Perhaps, to compete seriously against Apple, tablets vendors should change their sales strategy and learn from other markets such as, for example, the gaming consoles one.
For many years, console manufacturers (Sony, Microsoft, Nintendo) sold the hardware at low prices (sometimes the street prices were under the manufacturing costs) and invested heavily in developers to make money in medium/long term basis on games and services sales.
* It Has a complete ecosystem (including an AppStore),
* It Has the Kindle expertise;
* It Has the ability to sell/rent music and videos (including streaming) at good prices;
* It Already has an infrastructure to give any type of service;
In short, they could sell the device at a low price (even at manufacturing price or less) aiming to make you spend money on contents.
Any feedback is welcome.