"Today, we're going to show you the third leg of our device business strategy," Jeff Bezos begins. His audience is modest: four people sitting around a table in an Amazon conference room. It's a far cry from the Santa Monica airplane hangar his company rented out for last year's event. Bezos picks up a dry erase marker and begins breaking down the first two parts, elements the company has focused on since it first began building Kindles. "One," he says, narrating the words as he goes along, like an enthusiastic high school teacher, "premium products at non-premium prices. Two: make money when people use our devices, not when they buy our devices."
"We sell our hardware and roughly break even and then when they use the devices and buy content," he adds. "Our point of view is that this is more aligned with the customer. We don't have to get discouraged when we see people using fourth-generation Kindles. Bezos draws a Venn diagram to illustrate the third part of the puzzle. He writes "customer delight" on one side and "deep integration throughout the entire stack" on the other. The intersection houses the "hardest" and "coolest things," which utilize OS, key apps, the hardware stack and the cloud. "It's a little abstract," he adds, "but I think it will be extremely clear when I show it to you." The template for the third piece of the puzzle is the new Kindle Fire HDX -- the company's latest premium tablet.%Gallery-slideshow90904% %Gallery-slideshow90903%