Earlier quoted context omitted.
Amazon will knock $20 off the price of a kindle if you get the version with ads. And those only display static grayscale ads, advertisers may be willing to pay more for something more invasive. Extracting $25 of value from spyware on televisions doesn't seem out of the question.
Amazon doesn't make that Kindle $20 cheaper, it makes the ad-free version $20 more expensive, or at least, that's how I see it. That's more about market segmentation than the actual value of ads. Even if we assume ads are nothing more than an annoyance with $0 value, the "with ads" version may still be beneficial to Amazon. That's if people with a lower budget tolerate ads and those with a high budget don't. If they…
Can you point to another Amazon produced product where they achieve segmentation by making the same product and then disable features on the cheap one?