It wasn't until the price of HP's TouchPad was dropped from $399 for 16GB (it began life at $499) to $99 that the webOS tablet became popular. Of course, HP only lowered the price to that extent because it had pulled the plug on webOS hardware development, not because it wanted to sell the tablet at that price.
In fact, HP was losing a lot of money on those tablets. A teardown analysis conducted last month by the research firm iSuppli showed that a 16GB TouchPad cost $306.65 to build, while the 32GB version cost $328.65.
That said, how can Amazon.com sell the devices for hundreds less than the iPad? Well, we actually don't know how much "hundreds" equates to, but lets assume that means $200 at a minimum. It's already known that Amazon.com is opting for two-finger multi-touch displays in their tablet, as opposed to the ten-finger displays on current tablets. That should lower the price enough for a $299 price to work for the giant Internet retailer.
As well, it's possible that Amazon.com is more interested in making money with "consumables." Just as with printers, where the real money is in paper, ink, and toner, Amazon.com may consider e-books and apps to be where it makes the money.
Amazon.com opened up its own Android Market, the Amazon Appstore, earlier this year, but unlike the Android Market, users have to use the "sideload" capability most Android devices have to install a "non-Market" build.