$25 * 4'000 Pandoras = $100'000 loss on first batch. This is without financial backing or loans. I don't know if they include Pandoras handed out for free (to devs and press etc) into the cost figures, they are making less then $330 * 4'000 from the sales. I wonder what kind of profit they are making from the accessories.
The closest competition to the Pandora (as I see it) are netbooks, tablets and smartphones. I think the Pandora would have a competitive pricing even at $349, there is nothing else like it out there. If people understand what they get for the price, and the Pandora is something they want. To stay at that price they need competitive hardware of course.
The more I look at it the more I see the need for upgraded hardware (OMAP4) with the same case, keymat etc. only to attract more customers. I doubt many existing owners would upgrade unless they plan to give away or sell their first Pandora, or they have abused it and need a replacement.