Why? Its pretty simple. Not everyone just listens to music. There are a lot of readers out there. Its an untapped market and its just a matter of people becoming aware of the product. I had a lot of co-workers really interested when they saw how mine worked. Trouble is, during X-mas they were sold out and now they are backfilling that demand. Will it ever be as big unit wise as the ipod? Not likely, then again its a big market that is just becoming aware the product exist and like Apple and itunes, Amazon sells the books and thats a steady stream of future revenue.
Have you seen the prices? Hell yes they make money. I always wait for the paperback version because the price drops about $3. Bought one last night for a little over $6 that was $10+ as of last month when it was only available in hardback.
I take a kindle with me wherever I go. Battery last forever on a charge. Have a car charger and it takes about 10 min to completely recharge the thing. Like the ipod you can store all your books on it. When you leave it or turn it on, it goes right back to the page you left. You can get downloads of all the popular magizines, newspapers like WSJ, IBD and NY Times, and internet access. Works off cell service, not internet connection so you can review and download new titles while your on the go, nationwide. Also allows internet connectivity if you want so you can check you email as your driving down the road. There is no connection charge to prose, review and download material. There is if you want internet access but that is not the primary funtion.
I suspect that pretty soon you'll be to access phone calls and music from the device. Try downloading and reading books or magazines on a screen the size of cell phone or even something like the iphone. Way too small of a screen for that purpose. Expect the kindle to receive video teleconfrencing at some time in the future. The screen is fantastic and its clarity is not diminished in bright light. The thing is super light. Don't even know your carrying it.