Taking Kindle - Head On

Recently, I could say that I had a very close encounter to get in touch with Kindle & play with it for a long time to come. But somehow things didn't go as expected & it was more of a disappointment for me. Because, I know there is going to be such a fierce competition for Amazon's Kindle when placed against any other e-book readers which are up-coming. I was in fact very positive that Amazon will go offense - will have to add more value to the product for the money spent & at the same time get the price reduced.
But in the wake of IPAD, I just wonder what is Amazon's winning strategy.