Amazon Kindle fire real cost: 209.63

[carld]

I'm betting the cost is closer to the $150 range. I also don't believe Amazon ever sold the Kindle line at a loss. Their profit margin might not be huge, but I expect they do a heck of a sales volume.

[molman]

@Kali Yuga: Agreed. Costs often tend to be stack towards the beginning of a product lifecycle and generally only go down from there, and as you said it really depends on how they choose to present costs on the ledger.

One thing Amazon likely has is a reasonable grasp of the value of a customer, and some decent modelling for what profit they see themselves gaining with a device like the Fire acting as proxy.

That said the guestimates are such that I doubt they lose a dime on the hardware sold over a year regardless of other profits gained in content sales and such.

[HarryT]

Originally Posted by molman

That said the guestimates are such that I doubt they lose a dime on the hardware sold over a year regardless of other profits gained in content sales and such.

They have to recoup the R&D costs, though. Even though the Fire seems to be largely based on the Blackberry Playbook hardware, I'm sure that those costs were not insignificant.

[molman]

Originally Posted by HarryT

They have to recoup the R&D costs, though. Even though the Fire seems to be largely based on the Blackberry Playbook hardware, I'm sure that those costs were not insignificant.

Still personally doubt it, but really were unlikely to ever really know so as Kali Yuga said, what does it really matter.

[SteveEisenberg]

Originally Posted by =X=

Also selling devices below cost --in order to keep a copeditor from competing is illegal, I wonder if anyone will sue; there has never been a suit.

I'd never predict a lawsuit won't happen. But to win, wouldn't there have to be a domestic producer of eBooks making a claim against a foreign producer? Because such consumer devices have intellectual and physical components from around the world, it's hard to see this being a problem for Amazon. The Chinese and Taiwanese firms involved in hardware assembly might be at slightly more risk.

Has there ever been a poll here asking people, yes or no, whether they ever purchased Kindle content (books, newspapers, magazines, or blogs) from Amazon? I'm betting that the great majority of owners have, and not just once for a $/€/£ or two.

Expanding on Harry in #7: For Amazon to be selling at a loss, you have to take the total device lifetime revenue and have that be less than the total device lifetime cost paid for R&D, manufacturing, telephone support, fees to book publishers, etc.

[SteveEisenberg]

Originally Posted by Billi

Why is this good?

Why is it good if we get a below-cost price?

Excellent question.

Ask Jeff Bezos why it's good for him to have US$20 billion instead of US$10 billion.

Unless you are in poverty, on the consumer side, or care more about your employees than your stockholders, on the business side, I suppose it's a game.

My wife and I are not big into couponing, but isn't there a sense of achievement when you use a doubled coupon on a sale item and know you are getting it for free, or for a few cents and thus likely below costs?

Now, the desire to achieve financial success at the expense of some other entity does need to be leavened by a commitment to moral values. If Amazon was a company famous for putting people above profits, I'd be a bit ashamed to get something over on them. But, instead, this is Amazon, famous, at least lately, for treating workers badly. So, sure, if I reliably learned that Amazon lost money on my K3, I'd be happy.

[Dulin's Books]

Originally Posted by HarryT

They have to recoup the R&D costs, though. Even though the Fire seems to be largely based on the Blackberry Playbook hardware, I'm sure that those costs were not insignificant.

i think the estimates of BOM below $200 are correct. but there are more costs as you say and some of them are piled on at the beginning of sales like the r&d on the firmware, the boxing and advertisment costs, the importation costs etc etc. so they may be losing some on the fist "few" but the more they sell the sooner they amortize those residual costs and the later runs will be purely hardware and profit.

for instance Samsung just announced an upgrade to the Tab 7.0 . some people wonder why but its really a no brainer. they have already recouped the costs related to development etc and the minor upgrade costs followed by a longer sales life allows them to increase their profit for the device

Originally Posted by molman

Still personally doubt it, but really were unlikely to ever really know so as Kali Yuga said, what does it really matter.

actually i wish more people would have a better understanding of the BOM on all the gadgets. So every time a new device is launched there would be less people expecting a retail cost below any chance of profit.

[Barty]

I sense bogosity. The only thing being sold at a loss is the $99 touchpad.

[kennyc]

Silly to argue about this, no one really knows but internal Amazon people and the manufacturers.

As someone else said, who cares as long as people are not dying to produce them and they are offered at prices like these!

[molman]

Originally Posted by Dulin's Books

actually i wish more people would have a better understanding of the BOM on all the gadgets. So every time a new device is launched there would be less people expecting a retail cost below any chance of profit.

I personally would rather people be more aware of why these products are so cheap in the first place, the origin of some of the base materials and what specific issues this is all creating in the name of feeding western consumption to allow many to go whoo hoo a $200 tablet, how sweet.

[SteveEisenberg]

Originally Posted by molman

. . . feeding western consumption to allow many to go whoo hoo a $200 tablet, how sweet.

The technology used in the Kindle greatly overlaps that of cell phones, especially if you (as I do) have a 3G model. And according to a slightly dated web site I found, which I think is accurate, at the end of 2010 there will be 3.8 billion mobile subscriptions in the developing world – that’s 73 percent of global subscriptions.

I'm not saying there are zero labor or environmental concerns. But from what I can see, the Foxconn factories manufacturing the Kindle, as well as technically overlapping devices widely used in the non-western world, pay wages above the Chinese standard and are helping to pull the country out of its dire poverty. I was concerned by the articles concerning working conditions at US Amazon warehouses, which seem worse than the local standard. Also there are environmental advantages to these devices as well as concerns. In my case, they have resulted in a big newsprint consumption decrease.

Your profile says that you don't have an eBook device. Where do you draw the line on which electronic devices are and are not moral to own or use? Is paper consumption more moral than rare earth consumption?

[OtterBooks]

Originally Posted by molman

I personally would rather people be more aware of why these products are so cheap in the first place, the origin of some of the base materials and what specific issues this is all creating in the name of feeding western consumption to allow many to go whoo hoo a $200 tablet, how sweet.

Please don't remind me that we can't possibly keep pumping out millions and millions of these devices without end. It takes as much water/energy/precious metals to make an iPad as it does to make an automobile. Just leave the worrying to future generations. Haha, suckers.

[molman]

Originally Posted by SteveEisenberg

....Your profile says that you don't have an eBook device. Where do you draw the line on which electronic devices are and are not moral to own or use? Is paper consumption more moral than rare earth consumption?

Without taking this tread on a tangent the short answer is I struggle with it (morally), because yes it is often complex, but I do attempt to be thoughtful and aware to the best of my ability. Do I have electronics in my life, yes - simple fact I'm replying to this says as much. My observation however is more towards the hidden costs of many of these things whether they are social, environmental or otherwise. For me I would prefer awareness here rather than as to the BOM for said devices.

Originally Posted by OtterBooks

Please don't remind me that we can't possibly keep pumping out millions and millions of these devices without end. It takes as much water/energy/precious metals to make an iPad as it does to make an automobile. Just leave the worrying to future generations. Haha, suckers.

It's a little frustrating when we could be smarter about these things.

[kennyc]

There was a huge discovery or Rare Earth Elements in Afghanistan.

http://www.livescience.com/16315-rar...ghanistan.html

[elcreative]

Originally Posted by molman

I personally would rather people be more aware of why these products are so cheap in the first place, the origin of some of the base materials and what specific issues this is all creating in the name of feeding western consumption to allow many to go whoo hoo a $200 tablet, how sweet.

And don't forget that "western" consumption is rapidly heading to the minority with the rise, on the world scene, of the Asian power blocs and their increasing demands for the latest tech... getting tired of the "western" hair shirt brigade and their usual hypocrisy...