The Kindle Fire looks like a loss leader for Amazon (NASDAQ:AMZN), but just barely. Recent analysis suggests that the hardware and labor needed to make the Kindle Fire cost Amazon $201.70 for each device, just $2.70 above the product’s $199 retail price tag. Amazon makes its money on the content it sells to load up the Kindle Fire, and other mobile device makers have taken much steeper losses on product sales in order to boost sales of content and services.
IHS, the research group that dissected the Kindle Fire to analyze its price tag, found that some of the most important components were made by Texas Instruments (NYSE: TXN). TI’s OMAP4430 applications processor provides the tablet’s core functionality at a cost of $14.65.
The $201.70 cost is a preliminary estimate, and does not include Amazon’s expenses for software, royalties or licensing. The Kindle Fire started shipping to customers this week.
