Amazon’s Kindle 2 Costs $185.49 to Build, iSuppli Teardown Reveals

[DMcCunney]

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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Dennis

[daffy4u]

This same dollar figure popped up last April, so they're a little late with the news.

Edit: The article is from last April.

[DMcCunney]

Originally Posted by daffy4u

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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Dennis

[daffy4u]

Originally Posted by DMcCunney

I think Gizmodo got their numbers from iSuppli. I missed the earlier thread.
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Dennis

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.

[kjk]

The second (and subsequent) ones costs $185 each to produce.

The first one cost $30 million

[Kali Yuga]

Originally Posted by kjk

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.

[rcuadro]

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

[kjk]

Originally Posted by Kali Yuga

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.