A recent teardown of Amazon’s new Kindle Fire tablet reveals that the company is likely selling its new Android-powered slate at a loss. Market research and intelligence firm IHS iSuppli on Friday published its findings after disassembling the new Amazon Kindle Fire tablet and examining its components. Following its analysis, the firm determined that Amazon’s Build of Materials cost is $185.60, and its total cost including manufacturing-related fees is $201.70 per Kindle Fire. Prior to obtaining and disassembling the tablet, IHS had estimated its parts and manufacturing costs to be $209.63 per unit combined. Read on for more.
“The Kindle Fire, at a retail price point of $199, is sold at a loss by Amazon, just as the basic Kindle is also sold at a loss at the current $79 retail price point,” Andrew Rassweiler, senior director of teardown services for IHS, said in a statement. “Amazon makes its money not on Kindle hardware, but on the paid content and other products it plans to sell the consumer through the Kindle. This is a similar business model to wireless companies such as AT&T or Verizon. They sell you a phone that costs them $400 to $600 or more to make for a price of only $200. However, they expect to more than make up for that loss with a two-year service contract.”
IHS notes that its determination covers parts and manufacturing only, and does not take into account software, licensing, marketing, royalties and other related expenditures. The firm’s full press release follows below.
IHS notes that its determination covers parts and manufacturing only, and does not take into account software, licensing, marketing, royalties and other related expenditures. The firm’s full press release follows below.
Source BY bgr.com
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