Amazon Kindle Fire Costs $209.63 To Make

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According to best guesstimates, Amazon's $199 Kindle Fire costs $209.63 to make. That sounds about right, sell it at a slight loss so you can rake it in selling content for the device.

Research firm IHS offers a rundown of the device's components on its site. Materials for the Kindle Fire, which retails for $199, cost $191.65, but with factory expenses, that comes to $209.63. However, despite the apparent loss, IHS estimates that Amazon is "likely to generate a marginal profit of $10" on each Kindle Fire sold, when you take into account sales of digital content with the device.
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I can imagine they're going to make this thing *VERY* hard to root then. The only way they're gonna make a profit is through Amazon content, and each rooted device would be a net loss.
 
Yeah but how many people are actually gonna try and root it? Seems like if they made it somewhat easy, like through a USB drive, they'd sell more of their product to folks who would've not bought it in the first place... I dunno though, obviously
 
Interestingly enough, B&N just dropped the price on the refurbed Nook Color to 149. Don't let the refurb tag scare you, they still carry the 1 yr warranty.
 
Interesting, I thought that they would be making a few bucks, not losing a few. But less than $10 a device is not that big of a deal since as everyone notes, it's going to be tied to Amazon services. This is the first serious challenge to the iPad, these things are going to be hot for Christmas. I'd like to see one in store first before I take the plunge, I already am an Amazon Prime member and use Kindle so this thing will be pretty good for me for media. But I REALLY want an Series 7 Tablet for Windows 8.
 
Youn said:
Yeah but how many people are actually gonna try and root it? Seems like if they made it somewhat easy, like through a USB drive, they'd sell more of their product to folks who would've not bought it in the first place... I dunno though, obviously
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People will *definitely* try to root it. It'll probably be one of the most common devices (unless it's completely awful, but I'd be surprised) and there will certainly be a rooting community out there.
 
boss99 said:
Interestingly enough, B&N just dropped the price on the refurbed Nook Color to 149. Don't let the refurb tag scare you, they still carry the 1 yr warranty.
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and of course, it seems they are working on a NC2 right now. I guess the only reason why would be to include a faster SoC, preferabbly with more memory bandwidth (which is presumed to be the main reason why even CM7 nighlies lag a bit on the nook color). 16bit is low, when even nVidia is getting poked at for using a "small" 32bit memory interface... (though to be fair, nVidia has stated their experience in making GPU memory systems means they should be able to get away with a smaller interface...).
 
KatalDT said:
People will *definitely* try to root it.
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I agree, but i it's like 1% of their customer base, why try so hard to make it un-root-able... that was my point. Even if it's 10%, still seems to me like a wasted effort. Just IMO, I'd love it if it were the easiest thing to root
 
That's actually less expensive than I thought it was going to be. Must have saved a fortune on not including as much NAND as the other tablets.
 
Solidstate89 said:
That's actually less expensive than I thought it was going to be. Must have saved a fortune on not including as much NAND as the other tablets.
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Yeah, not a fortune but enough of a chunk to make a difference. I pre-ordered one for myself and one for a relative, they look great... I'll pick up a SquareTrade 3-yr warranty from them directly with accidental protection with a nice 30-45% off code once I get them, at least that's the plan ;).
 
Kindle Books sales and such make up for the extra $10..... not to mention other amazon crap they sale there at the store
 
In addition to selling content, Amazon.com stands to garner many more customers for its website by putting an oft used Amazon product into customer hands. Root prevention would diminish its popularity and tarnish their reputation among a crowd essential to their success: the geeks.
 
I'm actually surprised they're not taking more of a loss. A 10 dollar loss seems like a small price to pay though; because this thing is going to be huge. Even if half of them end up being rooted I bet they are going to make a shit ton of money on the content. In a year when the cost to manufacture drops by 20 or 30 bucks they're really going to be raking in the cash.
 
I doubt they'll worry about making tons of money from digital content relative to the tangible goods they'll sell. 2 day shipping? no sales tax? need a gift? need some groceries? click...buy...click...buy...right from the couch all day long.
 
I am sure they will make their money up when they sell this in the UK. We are normally charge £50.-£100 more than our friends across the water.
 
pablouk said:
I am sure they will make their money up when they sell this in the UK. We are normally charge £50.-£100 more than our friends across the water.
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Yes, but doesn't that largely have to do with shipping costs and other things like customs fees/taxes the UK gov't institutes for imported goods?
 
$209.63 each at what volume? If this thing really takes off and they have to ramp up production, it only means a cheaper unit cost in the future, so the $200 selling price will be inclusive of a profit. Right?
 
It's not just 10 dollars on downloads you are forgetting the margin on cases and cases with lights that are kindle brand only with custom jacks for kindle self power etc. That will also raise the profit margin.
 
Pretty effective plan, since they really want to sell content. Putting out the Fire pushes people towards their content, so it's a net win even selling at a slight loss.
 
It WILL be rooted, that's just a fact. The community is too smart and too dedicated for this thing to go unrooted. There is no longer such a thing as totally secure.

It doesn't matter though, because the average person does not give a shit about rooting their device and loading pirated content. Most people would rather just plop $50 in apps over the course of a year than spend the 4 hours it would take their non-techy self to get the thing rooted.

Mark my words, the death of piracy will be the ease of not pirating combined with low pricing. This is the steam model, and it will carry over into books, music, and movies soon enough.
 
The lack of storage in this case is brilliant. Not only do they save on not putting in 16, 32, or 64GB of flash, they practically force you to subscribe to their cloud storage services, and every corporation craves subscription fees...Nom nom nom SUBSCRIPTIONS.
 
Kueller said:
The lack of storage in this case is brilliant. Not only do they save on not putting in 16, 32, or 64GB of flash, they practically force you to subscribe to their cloud storage services, and every corporation craves subscription fees...Nom nom nom SUBSCRIPTIONS.
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Lack of storage? 8GB is fine for these kinds of things unless you plan on toting around several movies internally... which I can't say I've ever watched a single full-length movie on my tablet, let alone have had a need to be carrying several with me. 8GB holds a quillion books, a few hundred songs, a zillion pictures, and many apps... I've owned my Transformer since its April launch and have yet to cross over around 4.5gb of storage even with a ton of songs, apps, games, and books loaded. I could easily cut that down by streaming the music...
 
Kueller said:
The lack of storage in this case is brilliant. Not only do they save on not putting in 16, 32, or 64GB of flash, they practically force you to subscribe to their cloud storage services, and every corporation craves subscription fees...Nom nom nom SUBSCRIPTIONS.
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Oh, and in addition to what I stated earlier, the cloud services are included "free" with the Kindle Fire, no subscription required. Your argument = fail hyperbole.
 
The best thing about the Fire is it will lower the prices of competing tablets.

I personally would rather a tablet manufacturer to put in only 8GB with an SD card slot. Why pay for more permanent memory than I have to when I can just use an SD card which can be used in the next tablet I buy when I decide to upgrade?

I am looking forward to see what Amazon's 10 inch tablet will be.
 
Amazon is pretty smart on this one.

It speaks that they trust the thing will be very reliable kind of, I mean, if they are spending money to for people to take it, right?
 
DejaWiz said:
Yes, but doesn't that largely have to do with shipping costs and other things like customs fees/taxes the UK gov't institutes for imported goods?
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Nope 99% is pure greed and the fact that they continue to get away with it over charging.
 
GoldenTiger said:
Lack of storage? 8GB is fine for these kinds of things unless you plan on toting around several movies internally... which I can't say I've ever watched a single full-length movie on my tablet, let alone have had a need to be carrying several with me. 8GB holds a quillion books, a few hundred songs, a zillion pictures, and many apps... I've owned my Transformer since its April launch and have yet to cross over around 4.5gb of storage even with a ton of songs, apps, games, and books loaded. I could easily cut that down by streaming the music...
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8 gigs holds around a hundred books if youre reading comics/graphic novels. My ebook collection is over 10gigs and my comics are over 40. I cant put everything o my 32g touchpad.
 
mope54 said:
8 gigs holds around a hundred books if youre reading comics/graphic novels. My ebook collection is over 10gigs and my comics are over 40. I cant put everything o my 32g touchpad.
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You need to carry every book and comic you've ever read with you at all times, and can't stream with the built in seamless cloud player extra music as wanted if you need more than several hundred songs? Lol, amazing.
 
GoldenTiger said:
You need to carry every book and comic you've ever read with you at all times, and can't stream with the built in seamless cloud player extra music as wanted if you need more than several hundred songs? Lol, amazing.
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It's more like when you consider: Music, photos, books, videos, apps/games and OS together, 8GB doesn't leave much room for any of those things. Ever travel outside your home? Wifi is not nearly as pervasive as cloud proponents seem to believe, especially not open/public wifi. It was actually easier to find open wifi 4-5 years ago than it is today.
 
Kueller said:
It's more like when you consider: Music, photos, books, videos, apps/games and OS together, 8GB doesn't leave much room for any of those things. Ever travel outside your home? Wifi is not nearly as pervasive as cloud proponents seem to believe, especially not open/public wifi. It was actually easier to find open wifi 4-5 years ago than it is today.
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My cell phone acts as a wifi hotspot always for me. 8GB is plenty to store what you'd need when outside the home.
 
GoldenTiger said:
8GB is plenty to store what you'd need when outside the home.
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8GB really is plenty for the purpose of this device. I guess some people have uses but I could not see myself storing any real amount of photos on this. Its plenty to hold books and music with a number of apps. Add on that if you use the cloud service none of it is a problem anyway. I dont really want more than the immediate content that I need on a device like this.

Its already a pain in the ass to manage 10GB of ebooks on my desktop, I would hate to load hundreds of ebooks on a single table type device.
 
Just ordered a nook color for $150 new... not so much interested in the fire any longer ;)
 
DejaWiz said:
$209.63 each at what volume? If this thing really takes off and they have to ramp up production, it only means a cheaper unit cost in the future, so the $200 selling price will be inclusive of a profit. Right?
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+1

This analysis is merely based on generic publicly available prices, it doesn't include any closed door negotiations or mass volume discounts, and therefore, essentially useless.
 
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