Kindle Fire costs $210 to produce – $10 loss

It seems that Amazon will loss only $10 for each Kindle Fire sold, as IHS iSuppli priced the tablet’s components to $210. The total bill of Kindle’s Fire components is $191.65, plus additional manufacturing costs which brings the tablet to a total of $209.63.

“This business model is unique to Amazon,” the research firm said. “No other tablet brand or e-book reader operates such a broad retail service. … Conversely no other retailer can offer a tablet specifically designed to promote sales of its goods.

“The importance of this strategy cannot be underestimated. So far, no retailer has managed to create an umbilical link between digital content and a more conventional retail environment. With Kindle, Amazon has created the most convincing attempt at this yet, and it is doing so by using established retail tactics: deploying content to get shoppers in the door, and then selling them all sorts of other goods.”

The loss per Kindle Fire is smaller than we initially reported, which was $50.