Why does Amazon sell its Kindle for near to cost price?

Amazon announced in September 2012 that it would launch its new products in the UK the following month. The product could be purchased from Amazon’s website and through all other major electronics retailers. The announcement caused a flurry of media reports about the future of the tablet market. For example, The Telegraph, using the headline, iPad’s grip on tablet market weakens, speculated on a Pew research report which revealed that, while in 2011 81% of tablet owners were using an iPad, by 2012 this had dropped to 52% as competitors made up ground. On the day of the launch, many TV news channels reported the story and almost every tabloid and broadsheet, both online and off-line, mentioned it, affording Amazon some very positive publicity.