New Cost Estimate Shows the Kindle Fire is Sold at a Loss

The teardown experts at iSuppli have just finished taking apart the new Kindle Fire, and they have confirmed something we all suspected.

Amazon is selling the Kindle Fire at a loss. According to iSuppli, the KF cost a total of $202 to make. Given that it’s selling for $199, Amazon must really be interested in getting it into the hands of as many potential content buyers as possible.

 

Andrew Rassweiler, the IHS iSuppli analyst who supervised the teardown,noted that Amazon had stripped the KF down to minimize cost. “All the choices have been made here to minimize the hardware cost,” Rassweiler says. “We expected to see a certain wireless module that’s commonly been seen in other tablets, and we were surprised that it wasn’t there. There was a cheaper one with fewer features that saved them a few bucks.” Amazon cut costs every where they could, including using a cheaper Wifi chip, less RAM, and even skimping on the retail box. The basic brown cardboard box for the Kindle Fire only cost $3, where iSuppli had expected it to cost $5 or more.

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