Amazon recently upped the stakes in the tablet market with the release of the Kindle Fire with its low entry price. It has often been reported since we first heard about the device that Amazon will be making a loss on each device sold, and would make this up by selling content for the device. Today we can tell you that the Amazon Kindle Fire gets the teardown treatment, and the company is not losing much.
All Things D are reporting that the device got stripped down and that IHS iSuppli analyst Andrew Rassweiler says the device costs $201.70 to make. This provides a rough guide to how much Amazon will lose on each Kindle Fire sold, and the company has taken a number of steps to keep costs down.
Most tablet PCs have 8 gigabits of DRAM memory while the Kindle Fire only has four, and also has only 8GB of memory for storing content. The iPad begins at 16GB going all the way up to 64GB. There is also no camera and Bluetooth available either.
Rassweiler said “We expected to see a certain wireless module that’s commonly been seen in other tablets, and we were surprised that it wasn’t there”. The one that was installed was a cheaper unit that had less features to save a bit more money.
Other cost cutting features include the packaging of the device that is the same as other third party resellers, and the tablet only comes bundled with a wall charger and a cord. These are believed to cost around $2 or $3 when it was originally expected to be nearer $5.
As what normally happens with consumer electronics the cost of these components are likely to fall, so that will mean bigger profits for Amazon in the future. Texas Instruments have a number of chips inside the Fire. The main app processor is the OMAP4430 that has been in the Droid Bionic and BlackBerry PlayBook. The company also provided chips for managing audio, power, and Wi-Fi.
Whatever the unit costs Amazon to make it is surely going to be a major success with its low entry price compared to other devices available. Are you planning on buying the Kindle Fire?