Please provide me an information about Amazon selling the device at loss. I have a statement of their CEO about them selling it at cost, what you guys have ? http://www.reuters.com/article/2012/10/12/us-amazon-kindle-idUSBRE89B01K20121012 iTunes revenues were at 1.16 billion per quarter at the time. Versus 1.8-1.9 billion now. Unless Apple costs doubled, then their profits increased a lot. Sure, iTunes revenues are only 4% of their whole revenue, but that is not surprising at hardware company. No one is saying it has to be their current cash cow, but you can bet they are not losing money on the hardware itself. The point is to get you in THEIR product ecosystem and not have investments in the opponents ecosystem(s), because that means your upgrade path will be inside their ecosystem. You can already see that when people are unwilling to swap from iOS to Android or WP7/WP8 because they have bought apps for iOS and vice versa. That is the whole point of MS trying to get in the tablet market, with a help of desktop PC's where you get interested in their ecosystem and then you will probably choose the known system (Windows 8) instead of iOS or Android for your tablet. And when you upgrade, you will probably choose Windows again,... Same for other systems.