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Monday, 03 October 2011 12:59

Amazon sells Kindle Fire at a small loss

Written by


Hope to make money on content
Amazon’s Kindle Fire is the all the rage these days and according to IHS, Amazon is losing money on each tablet it manages to shift for $199.

The bill of material cost for the Fire is estimated at $191, just $8 less than the price, which means Amazon has a rather tight margin. However, if you add manufacturing and other costs, each Fire tablet sets Amazon back about $209.

Amazon hopes to recoup the loss in the long run, selling content to Fire users. With its vast content library, the concept makes sense. Of course, the BOM cost is also subject to change. Component costs tend to drop over time and if Amazon manages to ship a lot of tablets, prices should be lower, too.

Of course, Apple boasts and equally impressive content vault and it could do the same with its iPad. It just chooses not to.
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Comments  

 
0 #1 robert3892 2011-10-03 14:12
Amazon is hoping to attract services as I mentioned in an earlier article. As a sales gimmick they should offer customers a coupon included with the tablet for a discount on one of their items on their website to entice customers even further.
 
 
0 #2 markhahn 2011-10-03 20:29
the BOM is a matter of some dispute: if one starts with the Playbook BOM and subtracts parts, the result is more like $150. although Amazon is clearly focused on a content, it's simply not believable that they're losing money on the Fire hardware.
 
 
0 #3 robano 2011-10-04 19:30
One of the coolest site on internet. Believe it or not, This site (http://steampoints.com) giving Free Steam Games. Get Free Full Version PC Games and steam Games From (http://steampoints.com).
 

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