Amazon Kindle fire real cost: 209.63

jocampo · 09-30-2011, 10:44 PM

As per iSuppli, Kindle Fire manufacturing cost is about 209. If true, they are basically losing 10 dollars per device.

Those are ball park numbers but sounds credible. Here is the link:

http://thenextweb.com/mobile/2011/09...m=tnw.to_1B5sq

molman · 10-01-2011, 01:41 AM

Quote:

Originally Posted by jocampo

As per iSuppli, Kindle Fire manufacturing cost is about 209. If true, they are basically losing 10 dollars per device.

Those are ball park numbers but sounds credible. Here is the link:

http://thenextweb.com/mobile/2011/09...m=tnw.to_1B5sq

Interesting. Wonder if any further savings derived from seemingly similar parts/design used for the RIM Playbook are considered. Production lines etc. that likely need minimal retooling etc, or other economies. Could point to why they didn't go for a more unique/custom design ala Nook Color.

Laura81 · 10-01-2011, 02:15 AM

I'd love to find out the manufacturing cost of some other things like Ipads and Iphones... bet they don't take any losses on those suckers! It's good of Amazon to do so, though I know they are doing so with the intention of making it up in selling apps, etc.

Billi · 10-01-2011, 02:23 AM

Quote:

Originally Posted by Laura81

... bet they don't take any losses on those suckers! It's good of Amazon to do so

Why is this good?

Laura81 · 10-01-2011, 02:43 AM

I just think it's good that Amazon, a multi billion dollar giant, is willing to take a loss on their product to make it cheaper for the consumer. Most brands, like Apple, sell their products at far more than what it cost to make the device. Nothing meant by it other than what I stated.

=X= · 10-01-2011, 02:51 AM

Quote:

Originally Posted by jocampo

As per iSuppli, Kindle Fire manufacturing cost is about 209. If true, they are basically losing 10 dollars per device.
Those are ball park numbers but sounds credible. Here is the link:
http://thenextweb.com/mobile/2011/09...m=tnw.to_1B5sq

They are losing much more than that you need to also include the cost of R&De in addition to the infrastructure to support it.
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.

HarryT · 10-01-2011, 02:57 AM

Quote:

Originally Posted by Laura81

I just think it's good that Amazon, a multi billion dollar giant, is willing to take a loss on their product to make it cheaper for the consumer. Most brands, like Apple, sell their products at far more than what it cost to make the device. Nothing meant by it other than what I stated.

If it's being sold at a loss, it's not out of "goodness", but as a loss-leader to sell Amazon content. Just as printers are sold at a loss to sell ink.

Laura81 · 10-01-2011, 03:06 AM

Quote:

Originally Posted by HarryT

If it's being sold at a loss, it's not out of "goodness", but as a loss-leader to sell Amazon content. Just as printers are sold at a loss to sell ink.

I get that. I mean I know the are doing it so that people will then have to buy apps, etc.

OtterBooks · 10-01-2011, 03:13 AM

And UBM Insights estimates the cost at around $150.
http://blogs.wsj.com/digits/2011/09/...s-kindle-fire/

ZDNET posted an article claiming that Amazon "obviously subsidized its $199 Kindle Fire," citing the firm Piper Jaffray's estimated cost of $250.
http://www.zdnet.com/blog/btl/amazon...-rivers;item11

These analysts seem about as reliable as a carnival fortune teller.

OtterBooks · 10-01-2011, 03:25 AM

According to OtterBooks LLC, a firm that estimates production cost by rolling their face on a number pad, the Kindle Fire costs...

147

I could do this for a living.

HarryT · 10-01-2011, 03:36 AM

Whatever the numbers, it seems clear that the Fire isn't bring sold to make profit from the hardware, but from the content.

frahse · 10-01-2011, 04:04 AM

Quote:

Originally Posted by OtterBooks

According to OtterBooks LLC, a firm that estimates production cost by rolling their face on a number pad, the Kindle Fire costs...

147

I could do this for a living.

I thought that OtterBooks got those numbers by diving into a pond and seeing how many small pebbles they could pick up and put in their mouth while at the same time holding their breath.

It seems a very tricky business, if you ask me.

Like consulting an oracle or listening to the cauldrons tolling in the breeze.

kennyc · 10-01-2011, 06:37 AM

Quote:

Originally Posted by Laura81

I'd love to find out the manufacturing cost of some other things like Ipads and Iphones... bet they don't take any losses on those suckers! It's good of Amazon to do so, though I know they are doing so with the intention of making it up in selling apps, etc.

duh! http://paidcontent.org/article/419-a...nt-strategies/

gweeks · 10-01-2011, 08:22 AM

I don't believe BOM prices unless you actually get them from the manufacturer for that specific build. The BOM price on the same product can vary by an order of magnitude depending on volume and how much you have to push the lead time requirements. Faster build in smaller quantities cost way more than larger builds with more lead time. Larger build keep getting cheaper all the way up into the millions of units.

Greg Weeks

Kali Yuga · 10-01-2011, 09:27 AM

I also think tear-down pricing is, at best, quasi-educated guesswork. As mentioned, it doesn't include R&D or marketing costs, and doesn't seem to adjust for pricing changes over time.

The only way to know if the Fire is being sold at a loss today would be to actually look at the accounting. That also won't tell if you if it will be sold at a loss 3-6 months from now, as component prices will change and as R&D costs are recouped.

Besides, Amazon is a for-profit organization. Unless you plan to compete against them, I'm not entirely sure why it matters how they plan to separate you from your hard-earned cash.

09-30-2011, 10:44 PM	#1
jocampo Layback feline Posts: 3,034 Karma: 6980745 Join Date: Nov 2010 Location: USA Device: Oasis 2nd gen, Sony DPTS1, iPad Pro 10.5"	Amazon Kindle fire real cost: 209.63 As per iSuppli, Kindle Fire manufacturing cost is about 209. If true, they are basically losing 10 dollars per device. Those are ball park numbers but sounds credible. Here is the link: http://thenextweb.com/mobile/2011/09...m=tnw.to_1B5sq

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10-01-2011, 02:15 AM	#3
Laura81 Addict Posts: 360 Karma: 407796 Join Date: Oct 2009 Location: Victoria, Australia Device: Paperwhite 5	I'd love to find out the manufacturing cost of some other things like Ipads and Iphones... bet they don't take any losses on those suckers! It's good of Amazon to do so, though I know they are doing so with the intention of making it up in selling apps, etc.

10-01-2011, 02:43 AM	#5
Laura81 Addict Posts: 360 Karma: 407796 Join Date: Oct 2009 Location: Victoria, Australia Device: Paperwhite 5	I just think it's good that Amazon, a multi billion dollar giant, is willing to take a loss on their product to make it cheaper for the consumer. Most brands, like Apple, sell their products at far more than what it cost to make the device. Nothing meant by it other than what I stated.

10-01-2011, 03:13 AM	#9
OtterBooks Wizard Posts: 1,262 Karma: 2979086 Join Date: Nov 2010 Device: Kindle 4, iPad Mini/Retina	And UBM Insights estimates the cost at around $150. http://blogs.wsj.com/digits/2011/09/...s-kindle-fire/ ZDNET posted an article claiming that Amazon "obviously subsidized its $199 Kindle Fire," citing the firm Piper Jaffray's estimated cost of $250. http://www.zdnet.com/blog/btl/amazon...-rivers;item11 These analysts seem about as reliable as a carnival fortune teller.

10-01-2011, 03:25 AM	#10
OtterBooks Wizard Posts: 1,262 Karma: 2979086 Join Date: Nov 2010 Device: Kindle 4, iPad Mini/Retina	According to OtterBooks LLC, a firm that estimates production cost by rolling their face on a number pad, the Kindle Fire costs... 147 I could do this for a living.

10-01-2011, 03:36 AM	#11
HarryT eBook Enthusiast Posts: 85,544 Karma: 93383099 Join Date: Nov 2006 Location: UK Device: Kindle Oasis 2, iPad Pro 10.5", iPhone 6	Whatever the numbers, it seems clear that the Fire isn't bring sold to make profit from the hardware, but from the content.

10-01-2011, 08:22 AM	#14
gweeks Fanatic Posts: 506 Karma: 3367460 Join Date: Apr 2007 Device: Rocket, Nook ST, Kobo WiFi, Kindle PW	I don't believe BOM prices unless you actually get them from the manufacturer for that specific build. The BOM price on the same product can vary by an order of magnitude depending on volume and how much you have to push the lead time requirements. Faster build in smaller quantities cost way more than larger builds with more lead time. Larger build keep getting cheaper all the way up into the millions of units. Greg Weeks

10-01-2011, 09:27 AM	#15
Kali Yuga Professional Contrarian Posts: 2,045 Karma: 3289631 Join Date: Mar 2009 Device: Kindle 4 No Touchie	I also think tear-down pricing is, at best, quasi-educated guesswork. As mentioned, it doesn't include R&D or marketing costs, and doesn't seem to adjust for pricing changes over time. The only way to know if the Fire is being sold at a loss today would be to actually look at the accounting. That also won't tell if you if it will be sold at a loss 3-6 months from now, as component prices will change and as R&D costs are recouped. Besides, Amazon is a for-profit organization. Unless you plan to compete against them, I'm not entirely sure why it matters how they plan to separate you from your hard-earned cash.

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