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Old 02-26-2010, 01:26 PM   #1
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How much does it cost to build a Kindle?

$185 says this article from NPR

http://www.npr.org/templates/story/s...ryId=124107775

The article is actually abotu the decline symbolised by the inability to manufacture more of the device in the States. but it gives agood break down of the actual costs for the various bits.
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Old 02-26-2010, 01:41 PM   #2
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A bit higher than I would have expected it to still be.

They really need to find a way to get costs down. Costing that much makes it hard to cut prices on e-ink readers--which will be critical (at least for large screen readers like the DX, Que etc.) when the iPad and other things start rolling out and do more for the same or less money. The avid reader's here will still go e-ink, but the casual readers will be turned way from pricey devices that only do one task in the front of the other gadgets.
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Old 02-26-2010, 02:25 PM   #3
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The date of the article is current but the article cites the price of the CDMA chip so it looks like their information is a bit old. Still, I don't see the price going down all that much. The iSuppli breakdown of the iPhone 3GS was $179. Their 3.5" LCD touchscreen was $35 vs. $60 for the e-ink of the Kindle. We're so used to phones being subsidized we forget what they really cost. The Kindle has similar guts and a larger screen so I can't see how they're going to get it significantly cheaper. They could sell at a loss as the wireless carriers do but I'm not seeing where there's enough margin on books to make up for it.
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Old 02-26-2010, 02:26 PM   #4
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How accurate is that number though? They're getting their data from a blog that is pulling it's data from an estimate by a market research firm. Sounds dangerously close to the "we made it up" realm.
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Old 02-26-2010, 02:58 PM   #5
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The Kindle has similar guts and a larger screen so I can't see how they're going to get it significantly cheaper. They could sell at a loss as the wireless carriers do but I'm not seeing where there's enough margin on books to make up for it.
Yeah, that's the problem. And it's really going to hurt them in the casual reader market. The avid readers will stick with e-ink or similar screens and dedicated readers.

But as much as I like my Kindle, I can't see myself buying another e-ink device once the iPad and other tablets of various sizes etc. are rolling out unless e-ink devices are way cheaper. And it just doesn't seem likely to happen soon as the screen tech is just too pricey for big cuts.
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Old 02-26-2010, 03:05 PM   #6
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Quote:
Originally Posted by Dulin's Books View Post
$185 says this article from NPR

http://www.npr.org/templates/story/s...ryId=124107775

The article is actually abotu the decline symbolised by the inability to manufacture more of the device in the States. but it gives agood break down of the actual costs for the various bits.
There are an astounding number of typos in that short article.

Last edited by WT Sharpe; 02-26-2010 at 03:10 PM.
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Old 02-26-2010, 03:30 PM   #7
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Originally Posted by Alisa View Post
The date of the article is current but the article cites the price of the CDMA chip so it looks like their information is a bit old. Still, I don't see the price going down all that much. The iSuppli breakdown of the iPhone 3GS was $179. Their 3.5" LCD touchscreen was $35 vs. $60 for the e-ink of the Kindle. We're so used to phones being subsidized we forget what they really cost. The Kindle has similar guts and a larger screen so I can't see how they're going to get it significantly cheaper. They could sell at a loss as the wireless carriers do but I'm not seeing where there's enough margin on books to make up for it.
Yeah, that info was first reported in April 2009.
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Old 02-26-2010, 04:20 PM   #8
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Yeah, that's the problem. And it's really going to hurt them in the casual reader market. The avid readers will stick with e-ink or similar screens and dedicated readers.

But as much as I like my Kindle, I can't see myself buying another e-ink device once the iPad and other tablets of various sizes etc. are rolling out unless e-ink devices are way cheaper. And it just doesn't seem likely to happen soon as the screen tech is just too pricey for big cuts.
Well the price difference between the e-ink and the LCD isn't enough to bring it into line with what a casual reader would pay. If the screen were as cheap as the iPhone's 3.5" LCD, you'd still be at $160 and that's just the hardware price. You've still got $125 in non-screen components. Most of them are mass produced and already pretty darned cheap. I'm betting at $259 Amazon is barely breaking even on the Kindle if they are at all. Most casual readers wouldn't even consider it until it got below $100. Heck, I can't tell you how many people I've heard say they would only want one if it came free to encourage you to buy books. That model will just never work.

This is why I wholeheartedly agree with you that tablets will be the way of the future for most people. They offer enough additional functionality that people will pay the higher price. The cheapest iPad may be twice the cost of the Kindle but it does so much more. Most people don't read enough to be bothered by the lit screen. Besides, some day there will be a color screen that is both fast and eye-friendly. At that point, a single-function reader will have no point. There may be a few people who would still want them but not enough to be more than a tiny niche.
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Old 02-26-2010, 04:28 PM   #9
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I agree with you Alisa, the article should not have said America can't make it, it should have said people wont want to pay what it would cost if it was made in America.

Your comment on the iPad is probably right on as well, but we probably wouldn't want to pay for that either if it were made here.
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Old 02-26-2010, 05:11 PM   #10
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This is why I wholeheartedly agree with you that tablets will be the way of the future for most people. They offer enough additional functionality that people will pay the higher price. The cheapest iPad may be twice the cost of the Kindle but it does so much more. Most people don't read enough to be bothered by the lit screen. Besides, some day there will be a color screen that is both fast and eye-friendly. At that point, a single-function reader will have no point. There may be a few people who would still want them but not enough to be more than a tiny niche.
Agreed. Tablets have much more appeal to the casual reader as there's much more value in it since they can use it for activities they do more than reading like net surfing, video watching, games etc. etc.

And the color screens are so much better for magazines which are big among casual readers. Bigger screen (as well as color) is great for newspapers as well etc.

E-readers are only worth it for avid readers, and prices aren't going to get down fast enough to keep tablets from becoming the e-reading device of choice in the mainstream.
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Old 02-26-2010, 05:45 PM   #11
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The Kindle has similar guts and a larger screen so I can't see how they're going to get it significantly cheaper.
Well, there is now more competition in the screen controller market, the CPU costs are falling pretty rapidly and PVI's deal for mass production should see prices for the screens fall.

I'd point out that the announced prices for SiPix readers seem to be substantially cheaper...
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Old 02-26-2010, 05:47 PM   #12
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I'd point out that the announced prices for SiPix readers seem to be substantially cheaper...
Seems to be. Now that the SiPix provides a competitor to eInk that never existed before, eInk will have no choice but to drop their price to compete...

Competition is good for the customer. Everyone should love Apple and Macs if only because it pushes Microsoft to keep innovating and improving Windows...

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Old 02-26-2010, 05:56 PM   #13
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nm....

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Old 02-26-2010, 06:06 PM   #14
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Everyone seems to be missing another cost to be factored in.

The cost of R&D and writing the software on both a unit and in Amazons case the server side software.

For hardware, now that PVI own E-Ink and the investment they are making in new plant, volume should go up and prices down ( due to competition )

Maybe in 5 years everyone will be using collapsible AMOLED screens with reflective EPD qualities on a tablet
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Old 02-26-2010, 06:21 PM   #15
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Maybe in 5 years everyone will be using collapsible AMOLED screens with reflective EPD qualities on a tablet
like the "rolltop"

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