I think dedicated eInk readers are going to parish this year but I don’t agree that he should have changed the pricing earlier. I don’t think it would matter (they’ll need to have a more fulfilling product) and companies should price their products to what the market will bear.
Plus, Amazon has to pay Sprint, AT&T and others for access to their networks. I have no idea how they are charged but they have to include the 3G radios in the price of the device and pay for the data transfer in some fashion so it does makes sense that the cost for buying books cost Amazon more per MB than the zero cost Apple pays when you use your private provider. (When Apple added iTunes and App Stores to the phone this may have changed).
I really hope that 3G radios are included in Apple’s tablet.
It's worse than that. Amazon wanted it both ways: make money on the readers, make money on the content. That made sure the market was limited and folks that got the shaft were content providers.
Now there's another source that can kick their butts in terms of market penetration and hardware design, makes their money on hardware and commoditizes content (or at least access to content). It's a bit late to try to keep your content providers by matching their price when Apple is likely to sell more devices on launch week than you have as an installed base.
What Amazon should have done was sell the Kindle for cheap. That way, at least the high split could have been justified: we're building you a market and taking it in the shorts to sell kindles at a loss. When we have a huge market we can go to a more favorable split and we all make huge money.
Now the moment has been lost, their initial splash is gone and Apple is likely to clean their clocks...to the point where they may lose control over the one thing they REALLY gave a shit about: premier gateway for electronic books and media.