Dustin Curtis writes about Amazon’s seven year Kindle strategy after he noticed a price drop that, many suspect – him included – is extremely unlikely to generate any profit (emphasis mine):

If you think about seven years in the future, the Kindle Fire kind of makes sense. Amazon sees a future where digital content sales are a platform-locked commodity, and in order to make a profit, you need to control a platform–any platform. Amazon has no platform, and the Fire is a moonshot attempt to create one. If it wants to have a chance, it has to sell as many of the damn things as it can right now, even if it makes a loss, to kick-start an ecosystem that can survive many years before it potentially becomes a profitable marketplace for content.

I like that term "platform locked commodity" for a reason. Content is everywhere. It’s not just books and movies. It’s games, news, cat pictures, and all the amazing things the Internet delivers. If the content is everywhere and low cost as the term commodity implies, there has to be a premium on something to make a profit. Apple puts a premium in hardware.

But Amazon appears to be turning its device into a commodity by offering it at such a low price with no indication of offering a device people will value. Far for me to question the strategy because, on the surface, it makes sense. But if your competition is going to offer a commoditized service just like you, your long term strategy has to add a different value to customers. Commoditizing your only other differentiator (hardware) doesn’t seem like the way to go.