The Orange View (on hiatus) Because Apple is great but it isn't perfect

30Sep/11Off

Tiny subsidy for Kindle Fire (Updated)

The good folks at IHS iSuppli, who crack open new gadgets and guesstimate how much the materials and assembly cost, have an estimate for Amazon's new Kindle Fire tablet: $209.63. So the subsidy from Amazon is $10, not the $50 or more some speculated.

"The real benefit of the Kindle Fire to Amazon will not be in selling hardware or digital content. Rather, the Kindle Fire, and the content demand it stimulates, will serve to promote sales of the kinds of physical goods that comprise the majority of Amazon's business," IHS iSuppli said in a statement.

"When further costs outside of materials and manufacturing are added in -- and the $199 price of the tablet is factored along with the expected sales of digital content per device -- Amazon is likely to generate a marginal profit of $10 on each Kindle Fire sold," the research firm added.

-Reuters, September 30, 2011 (via Phandroid)

UPDATE: Another firm that provides the break-down estimates, UBM Techinsights, has an even lower value for the Fire: $150. Says UBM vp Jeffrey Brown:

"We expect that the Kindle Fire's dual-core processor will be the TI OMAP 4430, just like the Playbook, it will use similar flash memory from SanDisk and Toshiba and we don’t expect the similarities to stop there," he said.

The Kindle Fire cuts $10.50 from the Playbook costs by leaving out 5 and 3 MPixel front- and rear-facing cameras. Amazon saves $8 by using 8 Gbytes less memory than RIM, and another $1.50 by cutting out Bluetooth, GPS and microphone support, UBM TechInsights said.

-EE Times, September 28, 2011

Posted by Aaron Pressman

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