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Businesses Handhelds The Almighty Buck

Amazon To Lose $10 Per Kindle Fire 181

Posted by Soulskill
from the on-hardware-anyway dept.
An anonymous reader writes "According to a manufacturing cost breakdown, it turns out Amazon is willing to sell its new Kindle Fire at a $10 loss. An analyst estimates that the Kindle Fire, priced at $199, actually costs $209.63 to produce. That said, the device is likely to be much more valuable to Amazon through content sales and the ability to drive more purchases through its website."
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Amazon To Lose $10 Per Kindle Fire

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  • by icebike (68054) on Saturday October 01, 2011 @02:16PM (#37578388)

    That's either a totally bogus number, or inside information direct from the manufacturer.

    Nah, Neither is my guess.

    Fire up your telephone team and start polling parts manufacturers, who are often only too happy to brag about bagging a big order for wifi chip sets, touch screens, memory, processors, etc. Most of these places will even leak pricing info. The content of a tablet is well established these days. Crank in some custom plastic work (with 40 tablets on the market this cost is fairly well known too).

    Put it in a spread sheet, Crank in assembly, shipping, divide by number of units, an out pops the Bill of Materials cost.

    That's why you get things estimated to the penny.

    Maybe that qualifies as BOGUS in your world, but the story clearly states " analyst estimates". I'm not sure the word "bogus" can rationally be applied to an estimate.

    But it really doesn't matter. Amazon will make up any loss in the first month of ownership due to sales of apps, music, emagazines, and ebooks.

  • by manekineko2 (1052430) on Saturday October 01, 2011 @02:22PM (#37578426)

    http://www.pcmag.com/article2/0,2817,2393740,00.asp#fbid=ajRIdnxQUAV [pcmag.com]

    "Amazon isn't doing anything special to prevent techies from "rooting" and rewriting the software on its powerful yet inexpensive new tablet, Jon Jenkins, director of Amazon's Silk browser project said."

The test of intelligent tinkering is to save all the parts. -- Aldo Leopold

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