Amazon Loses $2.70 On Every Kindle Fire Sold

Illustration for article titled Amazon Loses $2.70 On Every Kindle Fire Sold

There had been rumors that the Kindle Fire cost more to build than Amazon was selling it for, and that rumor is true. According to iSuppli, every one of those tiny tablets costs 201.70 to build.

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The display is the most costly component in the Kindle fire, costing $87 to build. Other components, such as the RAM, battery and the case all cost around $15-$25. As for the lack of profit margins, Amazon losing money on the hardware isn't particularly shocking, since they'll just make it back in book/magazine/music/video sales (which as AllThingsD astutely points out, is the exact opposite of Apple's approach to hardware and content selling). But it's always a risk. [iSuppli via AllThingsD]

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DISCUSSION

I dont get it, why wouln't they just price it at $205 and then eliminate that risk and not lose $2.70 on the thousands/millions that are sold??