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

Ad supported usually equals free these days.

I agree, it would make more sense to also have discounts on the books.

it seems it does have something like that, at least from what I can understand from techcrunch

> Amazon says it will be pushing “special offers directly on your Kindle”, including things like $10 for a $20 Amazon gift card, and $6 for 6 Audible books.

http://techcrunch.com/2011/04/11/amazon-announces-ad-support...

EDIT: ah, it was at the end of the amazon page actually :)

Give them time to line-up sponsors and continue refining the business model and per-unit costs:

http://www.kk.org/thetechnium/archives/2011/02/free_kindle_t...

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?

it would have to display a lot more ads ... like as you're reading ... maybe video ads w/sound ... and flashing lights while we're at it.