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This is interesting I think... iPad: Kindle Fire, Nexus 7 Apple TV: Kindle Fire TV, Chromecast iTunes: Amazon Prime Streaming TV + now music, Google Play iPhone: Kindle Fire Phone, Nexus 4 I think they're all playing for the same territory. The big difference seems to be that Apple really only sells the technology. Google sells the technology so that they can sell advertising for third party products. Amazon has the…
You make a good point: Apple: Sell at high price, modest tie-in revenue. Google: Sell at low price, modest tie-in revenue. Amazon: Sell at low price, high tie-in revenue. It does seem like Amazon is bound to win in the long run, based on pure economics, if this trend continues.
Apple: We sell an experience of software and hardware. Google: We sell ads, based on data we gather from our users. Amazon: We sell commodities\services as close as possible to the marginal utility, so we're very competitive.
Altough each of these tech giants are competing, each has quite a different strategy.
As for the Fire phone, I think that Amazon realized that they could deliver an excellent shopping experience from the mobile phone. This would enable massive future growth: Think about going home in the train and buying groceries instead of driving to your nearest Wallmart.