The IHS iSuppli teardown experts have disclosed that Amazon spends $ 201.70 to build up the new Kindle Fire while they are sailing it for $ 199, which is bringing nearly $ 3 loss to them. Previously many other experts have predicted much larger loss for Amazon if Amazon would fixed such low price for the Kindle Fire only to beat other similar devices, like Apple iPad 2, which costs $ 499 or the Nook Tablet which cost $ 249. But now experts believe that Amazon will turn the loss into profit with the help of the sale of products and apps.
In the production cost of $ 201.70 Amazon spends $ 185.60 for hardware and $ 16.10 is the charge of manufacturing the device. The teardown experts have estimated the actual teardown cost $ 201.70. They have estimated it from a Kindle Fire tablet, launched on Monday. According to their last statistics Amazon spends the maximum portion of the production cost for the display and the touchscreen and that is $ 87. Except this they spend $ 64.45 for other peripherals, $ 16.50 for battery, and $ 14.40 for the case and $ 3.34 for the box contents.
Andrew Rasseiler, who is the senior director of teardown services at iSuppli, has mentioned that hardware is not the field from which Amazon is making profit, but the paid content and apps which are making profit for Amazon.
iSuppli has disclosed that Amazon is using the same processor as the BlackBerry PlayBook tablet and the Motorola Droid Bionic and LG Optimus 3D smartphones. Amazon spends $ 14.65 which is 7.9% of the total production cost for the processor, specifically the 1GHz Texas Instrument’s OMAP 4430 dual core.