At a price of $199, Amazon is selling its Kindle Fire tablet at a loss, but it might not be quite as much as previously believed, according to a report released today.

A detailed analysis by research firm IHS iSuppli, assessing everything from the display to the battery, estimates the Kindle Fire’s bill of materials cost to be $191.65. The total production cost goes up to $209.63 when taking into consideration additional manufacturing costs.

In advance of the launch, Amazon had been reported to be considering a price of $250, making the $199 price was a surprise.

IHS iSuppli says it believes Amazon is “willing to settle for a razor-thin margin on sales of devices and digital content in order to achieve the larger goal of promoting merchandize sales at its online store.”

That’s consistent with what Jeff Bezos has said previously about tablets. “Most of our customers shop with us from desktop or laptop computers, but people have a different posture with tablets,” the Amazon CEO said at the company’s shareholder meeting this year. They “lean back on their sofa. People leaning back on their sofa, buying things from Amazon, is another tailwind for our business, so I’m very excited about that.”

Previously on GeekWire: Rundown: Kindle Touch, Kindle Fire and a new era for Amazon.com … Analysts: Kindle Fire will lose a ton of money, at first

[Via Reuters]

Comments

  • http://www.appatic.com Avatar X

    He later adjusts and say that Amazon probably makes 10 bucks from each Kindle Fire. I also did my own estimate based on this one and i reach to a similar conclusion: Amazon is not only not losing money with the Kindle Fire. At worst they would breaking even. At best they are making 10 bucks on each. But the kicker is that this will only be for the first 3 to 6 months. Later on they should surely be making anywhere from 15 to 25 on each.

  • http://colorebookreader.org/ Amazon Fire

    Apparently, Geeky Gadgets puts it at about $150
    http://www.geeky-gadgets.com/amazon-kindle-fire-costs-150-to-make-04-10-2011/
    With 200 sales per hour so far and $50 profit per tablet, it’s going to be a good payday when they all ship.
    Inger

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