Amazon To Lose $10 Per Kindle Fire

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."

Well if an anlyst says so it must be true

[blahbooboo]

Gosh, these analysts get such huge salaries and most of the time they are wrong. What a great job!

Only $10?

[Sarten-X]

So a company with the bargaining power of Amazon makes a new product, and can't get the price down $10 more? I find that hard to believe. On top of that, the component prices in TFA are estimates. I see no indication of how accurate they are. I also don't see any point to this story.

Re:Well if an anlyst says so it must be true

[Xacid]

I find it hard to believe an estimation like this could even consider a $10 dollar difference not within margin of error. Pretty much non-news here.

Re:Well if an anlyst says so it must be true

[CastrTroy]

I agree. The only one who knows how much Amazon pays for each individual part is Amazon. These analysts have no idea what kind of deals Amazon has made with their suppliers. When you are dealing in the millions of units, there is quite a bit of negotiating room. Maybe the people who produce the parts are the ones taking a loss (initially) because they figure they can make more as production ramps up, and they would rather not lose the contract entirely. Analysts can make all the guesses they want as to the cost of these things. But something tells me they have no idea what they are talking about. How come the HP Tablet cost $300+ to make, but you can get a netbook with similar bill of materials for $179 retail?