Only $25 cheaper than a regular kindle? Doesn't seem like much of a discount.

Ad supported usually equals free these days.

The natural subsidy model for Kindles (to me) has always been subscribe (to publication x) for a period certain, get a reduced-price device.

My suspicion is that this is an incremental development which will serve as a transition to a new pricing structure. As hardware costs decline, one of the largest variables in the pricing structure for these devices will come to be estimations of customers' future spends in the store.

Any model that guarantees a spend is likely to find traction, and I expect to see multiple subsidy models emerging.

How long before we see a completely free Kindle?