Amazon's bill of materials (BOM) for the $199 Kindle Fire is estimated to be $185.60 -- below a previously stated $191.65 -- but increases to $201.70 if assembly cost is included, according to a report released by IHS.
[citation][nom]__-_-_-__[/nom]This is a great deal if can be hacked[/citation]
It was rooted 2 days after sales started. You can find that news here somewhere, I think it's from day before yesterday or day before.
Actually that's your dick, not amazon [citation][nom]amk-aka-Phantom[/nom]God.... can everyone STFU about Kindle Fire?! Amazon products somehow always get 10x the attention despite the fact that there's nothing outstanding about them.[/citation]
These teardowns ALWAYS ignore the economies of scale that take effect when producing simply enormous quantities of a product.
Sure, it might cost 201.70 to build a few thousand, but amazon is having 5 million made, and that kind of volume WILL drastically reduce the price.
Its the same as if you bought all the parts from Ford (or whoever) to build your own car out of original parts, thats going to cost you 4-5 times as much to build the car as it does the original carmaker.
[citation][nom]zybch[/nom]These teardowns ALWAYS ignore the economies of scale that take effect when producing simply enormous quantities of a product.Sure, it might cost 201.70 to build a few thousand, but amazon is having 5 million made, and that kind of volume WILL drastically reduce the price.Its the same as if you bought all the parts from Ford (or whoever) to build your own car out of original parts, thats going to cost you 4-5 times as much to build the car as it does the original carmaker.[/citation]
Still doesn't change the fact that they aren't making much on the tablet and relying on other sources of income from the device to make profit. Which isn't new, consoles have been doing this for ages. Sell at a loss, gain money from developers making games for your product takes some but you'll make money if it doesn't fail early on.
Amazon is in the content business and that is what they are selling. The difference in cost versus price for the Fire is an advertising expense in the context of their business model. Regardless at $200 the Fire is a value purchase for consumers, no it is not an I-Pad and yes it is missing some features that you can easily find if you want to pay more for a different product. Day 4 and I am happy with my purchase and how much Amazon makes or loses on the sale does not Fire up my interest. I paid $200 and am happy.
[citation][nom]santfu[/nom]but at least amazon are clearly not raping their consumers....[/citation]
Eh the costs does not include R&D, shipping, advertisements, licensing, etc. They're loosing a lot for each sale.
They may be losing a lot of money right off the bat, but R&D and advertising costs per unit decrease with more production. They have already succeeded where so many other companies have failed, to market and release a tablet that can sell unit for unit with the iPad in volume. Sure, it isn't as powerful a unit as the iPad, but if it has the right apps, and a good browsing, movie and music experience, that is all most consumers care about. If they can get that experience at $300 less then the baseline iPad, all the better.
Not to mention, with this swift stroke with the Kindle pricing they have all but eliminated B&N from being able to compete at this point, which I think is more important to them in the long run. If they can get B&N to go belly up so the Nook is no longer an option, any costs they incur now is definitely worth it as they would pretty much have monopolized the industry.