The cost of building a kindle 2 (without the whispernet)

[kaas]

Originally Posted by wallcraft

As JSWolf points out, the Epson controller is missing from the parts list. I don't know what it costs, but it is significant that almost all the new EInk devices (except the very low end ones) we are hearing about will be using the Epson controller. So it can't be very expensive.

if you look at the added image, you will see that the epson controller costs just a bit more than 4.30 USd. That actually surprised me, as I counted on a bit more...

cheers,

kaas

[WaltC]

Originally Posted by kaas

actually it does point out the labor:

$8.66 in construction costs

cheers,
kaas

The isupply table says "$8.66 in Conversion Cost"-- is that the same thing as construction cost? I googled "conversion cost" and it sounded like conversion cost was used to apply factory overhead (building, etc.) to the cost of building a widget-- maybe "overhead" includes labor costs as well.

Update: reading the engadget version of this story they say: "conversion costs-i.e., manufacturing expenses and the battery". So that sounds like labor, etc. is included as well.

[delphidb96]

Originally Posted by Moejoe

Correct me if I'm wrong, but wouldn't the $60 figure be in volume or bulk orders?

Yep. As long as you're talking 50,000 or MORE screens per order (SPO). Less than 10,000 SPO quickly raises the per-screen price to over $110/screen - or so I was told the last time I checked. I've heard single-quantity order price quotes of $125-$150 recently.

Derek

[sirbruce]

Originally Posted by WaltC

The isupply table says "$8.66 in Conversion Cost"-- is that the same thing as construction cost? I googled "conversion cost" and it sounded like conversion cost was used to apply factory overhead (building, etc.) to the cost of building a widget-- maybe "overhead" includes labor costs as well.

Update: reading the engadget version of this story they say: "conversion costs-i.e., manufacturing expenses and the battery". So that sounds like labor, etc. is included as well.

Usually conversion cost means the cost of acquiring a new customer; i.e. sales and marketing, but that's also known as acquistion cost.

[Kris777]

Originally Posted by kaas

a nice article from www.gizmodo.com:

----------------------------------------------------------------------

iSuppli: The Kindle 2 Costs $185.49 to Build



According to an iSuppli teardown, the Kindle 2 costs $185 to build—or about half the device's $360 sticker price. That's $176.83 in parts, $8.66 in construction costs. Here's the major component breakdown:

E Ink Display (by E Ink)
$60

EVDO (by Novatel)
$39.50

Baseband Processor (by Qualcomm)
$13.18

8-Layer Printed Circuit Board (by Multek)
$9.83

532MHz Multimedia Application Processor (by Freescale Semiconductor)
$8.64

Battery (by LICO Tech)
$7.50

Main Enclosure
$4.45
---------------------------------------------------------------

I wonder what Amazon has to pay for whispernet...

cheers,

kaas



p.s.: here a list from engadget with the epson controller!

What is the link for this article on www.gizmodo.com?

[DanT]

Originally Posted by Kris777

What is the link for this article on www.gizmodo.com?

Here is the Gizmodo article which doesn't say much more but refer to the original iSuppli article which has done the actual evaluation

[zelda_pinwheel]

actually from what i have heard 60$ for the eink screen is accurate.

[Kali Yuga]

Sounds fairly accurate to me. Obviously there are lots of costs not included, though:
• Whispernet
• Marketing
• Sales and shipping
• Support (including hosting & moderating their own forums)
• Software & royalties (as mentioned in the article)
• Taxes

I'm not sure what the Whispernet costs are, but obviously that's not a typical charge for a portable electronic device. Might be a tough one to calculate as well, since you might want to include the total charges for the life of the unit.

So, it seems like the gross margin per unit is going to be a tad lower than $175.

[lovebeta]

At least now we know that Sony PRS-505 has a higher profit margin because it has

1. No EVDO unit, $39.5
2. No WhisperNet
3. No subsidy on ebooks.