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Old 12-25-2009, 04:39 PM   #1
DMcCunney
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Amazon’s Kindle 2 Costs $185.49 to Build, iSuppli Teardown Reveals

Industry research firm iSuppli did a treardown of the Kindle, and provided building cost estimates. As expected, the eInk display was the most costly part, at $60, with the wireless broadband module second, at about $40.

http://www.isuppli.com/News/Pages/Am...n-Reveals.aspx
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Old 12-25-2009, 05:14 PM   #2
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This same dollar figure popped up last April, so they're a little late with the news.

Edit: The article is from last April.
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Old 12-25-2009, 05:19 PM   #3
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Originally Posted by daffy4u View Post
This same dollar figure popped up last April, so they're a little late with the news.

Edit: The article is from last April.
I think Gizmodo got their numbers from iSuppli. I missed the earlier thread.
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Old 12-25-2009, 05:26 PM   #4
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I think Gizmodo got their numbers from iSuppli. I missed the earlier thread.
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I only remembered it because refurbished Kindle 1s were being sold at around the same price, so it just kind of stuck in my head.
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Old 12-25-2009, 05:40 PM   #5
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The second (and subsequent) ones costs $185 each to produce.

The first one cost $30 million
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Old 12-25-2009, 08:27 PM   #6
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The second (and subsequent) ones costs $185 each to produce. The first one cost $30 million
Heh... Yeah, that's one of many problems with these "teardowns." People with no sense of manufacturing read it and think "wow, it cost $10 to make and they charge $100, we're getting ripped off." People don't usually consider all the associated costs: R&D, legal, taxes, customer service, marketing, retailer's cut (if applicable) etc etc.

I.e. knowing that a Kindle is allegedly made of $185 in parts doesn't really provide much accurate information about how much it really costs, or what profit Amazon is making on these things.
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Old 12-25-2009, 10:05 PM   #7
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You also have to take into account the research that goes into developing the Kindle... and they are going to get as much for the Kindle as the market will support
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Old 12-25-2009, 10:10 PM   #8
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Quote:
Originally Posted by Kali Yuga View Post
Heh... Yeah, that's one of many problems with these "teardowns." People with no sense of manufacturing read it and think "wow, it cost $10 to make and they charge $100, we're getting ripped off." People don't usually consider all the associated costs: R&D, legal, taxes, customer service, marketing, retailer's cut (if applicable) etc etc.

I.e. knowing that a Kindle is allegedly made of $185 in parts doesn't really provide much accurate information about how much it really costs, or what profit Amazon is making on these things.
Its pretty interesting (well, maybe just to me) to track Amazon's R&D spending-
2004: $251 million
2005: $451 million
2006: $662 million
2007: $818 million (Kindle 1 released in Nov.)
2008: $1 billion
2009: Kindle 2, Kindle DX released

Up until recently, Amazon's R&D has increased pretty steadily without seeing a commensurate payback in operating income-one of the big criticisms of them in the past.

I'm guessing its because they have invested heavily in the Kindle/eBook transition, and just haven't reaped the benefits yet. One thing about Bezos, he certainly thinks long-term.
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