Jeff Bezos tells Wired why the Kindle is so expensive

At the same conference (as in the previous entry) Wired reports in better detail what Bezos said about the pricing model of a cheaper device with a 2-year subscription.  Bezos told Wired:

' "We sell a lot of cellphones for a penny, and you know, when you’re buying a cellphone for a penny, there’s got to be a catch — and there is” in the recurring cost of monthly service which is free with the Kindle’s Whispernet service. '

[The Novatel MiFi 2200 has $60/mo. plans being offered with Sprint and Verizon for similar high or unlimited-use plans.]

' Still, if customers preferred smaller hardware cost and higher operating fees he would still consider that approach.  Bezos maintains that Amazon could have sold the DX for $99, but only with a required monthly subscription of $60 or more per month, or by forcing Kindle owners [to] buy a certain number of books each month.

“[The Kindle DX] is $489, and that is an unbelievably low price for something that has inside it a sophisticated computer, a completely new kind of display of that size, and a 3G wireless radio,” Bezos said. '

I'd say it's not "an unbelievably low price" ! except for the fact that the iRex iLiad at that size and without free 24/7 wireless plan does cost abut $860.

Note that in the New York Times's blog piece, Bezos said he's not opposed to one of the subscription plans later if customers want it but that he still doesn't like that approach.