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Kindle Fire Costs Amazon $201.70 to Build

"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," said Andrew Rassweiler, senior director, teardown services for IHS. "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. This is a similar business model to 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. However, they expect to more than make up for that loss with a two-year service contract."

IHS said that Amazon surprisingly uses an "unfamiliar source for the touch screen controller integrated circuit", Ilitek, as well as a wireless local area network (WLAN) module from previously unknown supplier called Jorjin.

Texas Instruments (TI) scored major design wins in the Kindle Fire as it supplies the OMAP4430 processor for an estimated cost of $14.65, the power management device and the audio codec. IHS believes that TI's revenue per Kindle Fire is about $24 per each Kindle, or 12.9 percent of the BOM. The OMAP4430 is based on a dual-core ARM Cortex-A9, 1GHz architecture, which includes the IVA 3 hardware accelerator and a SGX540 3D graphics core.

If you want to know more about the Kindle Fire's insides, check out iFixit's teardown.

  • de5_Roy
    lol imagine negotiating with intel to deliver an soc at that price!
    amazon seems to be cutting it a bit close. i guess they'll make bigger profits from content sales and subscriptions.
    Reply
  • rohitbaran
    __-_-_-__This is a great deal if can be hackedI think that Fire has been rooted.
    Reply
  • hetneo
    __-_-_-__This is a great deal if can be hackedIt 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.
    Reply
  • amk-aka-Phantom
    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.
    Reply
  • homerhellboy223
    Actually that's your dick, not amazon amk-aka-PhantomGod.... can everyone STFU about Kindle Fire?! Amazon products somehow always get 10x the attention despite the fact that there's nothing outstanding about them.
    Reply
  • joytech22
    homerhellboy223Actually that's your dick, not amazon
    So do Apple's products. :\
    "Oh look, a new shiny came out this year, better get it"
    Reply
  • joytech22
    ^My previous post I was supposed to quote amk-aka-Phantom, not Homer.
    Reply
  • santfu
    but at least amazon are clearly not raping their consumers....
    Reply
  • zybch
    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.
    Reply
  • proxy711
    zybchThese 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.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.
    Reply