Amazon sells Kindle Fire below cost

2011-11-18 22:37

New York - -At $199, Amazon is selling the Kindle Fire slightly below the cost it takes to manufacture the tablet computer, according to market research firm IHS iSuppli.

In a "teardown" estimate published Friday, IHS iSuppli said it costs $201.70 to manufacture the Kindle Fire, which Amazon began shipping to customers this week.

"The Kindle Fire, at a retail price point of $199, is sold at a loss by Amazon, just as the basic Kindle is also sold at a loss at the current $79 retail price point," IHS iSuppli's Andrew Rassweiler said.

"Amazon makes its money not on Kindle hardware, but on the paid content and other products it plans to sell the consumer through the Kindle," Rassweiler said.

He compared Amazon's business model to that of wireless companies such as AT&T or Verizon.

"They sell you a phone that costs them $400 to $600 or more to make for a price of only $200," he said. "However, they expect to more than make up for that loss with a two-year service contract."

The IHS iSuppli estimate only takes into account hardware costs and not software, licensing, royalties or other expenditures.

At $87, the most expensive component in the Kindle Fire is the touchscreen display which Amazon sources from LG Display and E Ink Holdings, according to IHS iSuppli.

Amazon refuses to give sales figures for the Kindle electronic book reader or the Kindle Fire but the company said this week that the Kindle Fire is the "best-selling" item on

The Kindle Fire has a 7-inch screen, smaller than the iPad's 9.7 inches, connects to the web using Wi-Fi and is powered by Google's Android software.

It does not have a camera or the 3G connectivity featured on other tablets but it gives buyers easy access to Amazon's online store, which sells books, music, movies, television shows, games and other content.

Read more on:    amazon  |  technology

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

linking and moving

2015-04-22 07:36 publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
1 comment
Comments have been closed for this article.

Inside News24


Millions of plastic particles in our food!

Scientists and researchers believe that almost five million tons of plastic is dumped in the oceans every year and it’s affecting our food.



Plastic on your plate
Prince George the green prince?
Lean, green, drifiting machine
One man's $1 million vision for an eco Africa

Book flights

Compare, Book, Fly

Traffic Alerts

Trying to keep time for your social commitments and friendships as well as taking care of work and health obligations can be more

There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.