Amazon to lose $1.71 on every Kindle Fire sold according to iSuppli estimates

Software to bridge the gap

Amazon to lose $1.71 on every Kindle Fire sold according to iSuppli estimates
Kindle Fire may be something of a bargain for consumers, but Amazon itself looks to be taking a hit for every unit it sells according to figures from iSuppli.

The firm estimates it costs Amazon $201.70 to build each Kindle Fire, which means, with an initial price of $199.99, the firm will lose $1.71 for every one of the devices sold.

This figure is actually less than the $10 margin originally estimated by iSuppli back in October 2011.

Supply chain

The main culprit in the cost of manufacturing is the Kindle Fire's screen which costs $87 to build. Other components, such as the RAM, battery and the case cost between $15-$25.

The maths still add up for the company though, with Amazon picking up revenue aplenty from apps, games and books et al that will be sold on the device.

Initial estimates forecast 5 million Kindle Fires will be sold before the end of 2011, with initial shipping volumes reportedly increased to deal with demand.

[source: iSuppli]

When Matt was 7 years old he didn't write to Santa like the other little boys and girls. He wrote to Mario. When the rotund plumber replied, Matt's dedication to a life of gaming was established. Like an otaku David Carradine, he wandered the planet until becoming a writer at Pocket Gamer.


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