I think you’re overestimating how much it costs Apple to make an iPad. They have a popular product, so they charge a pretty high premium for it. The iPad Mini is estimated to cost $188 to build and most of the rest of the parts that go into a Kindle would be considerably cheaper. Also remember that the Fire line is being sold very cheaply, because Amazon wants to get you into their ecosystem, not just buying the hardware. A $120 Paperwhite and a $170 “Textbook” Kindle is totally realistic, though it might not be as big a seller, but if they could make deals with textbook publishers, it could work out great for them.