Photo: Steve Kovach, Business Insider
The Kindle Fire costs $209.63 to produce, according to an analysis from iSuppli.That number doesn’t accound for shipping, labour, etc., so Amazon is losing a bit more than $10 per tablet.
Still that’s a lot less than Gene Munster’s estimate that Amazon will lose $50 per Fire sold.
iSuppli is usually very good at analysing the cost of components and labour, so its estimates feel more accurate than Gene Munster’s.
Amazon is ready to ship “millions” of Fire tablets by the end of this year, which makes its new business a pricey venture.
Still, as we’ve said, that’s the point. Amazon is known for taking a loss in order to gain rapid adoption. It hopes all those Fires will boost its Prime and instant video business in the long run.