Amazon selling Kindle Fire tablet at a loss

Amazon’s new Kindle Fire tablet costs a reasonable $199. That price becomes even more reasonable when you learn that the Kindle Fire tablet actually costs the eBook and digital shopping giants $201.70 to make.

That’s the news from tear-down specialists IHS iSuppli, who’ve put together a piece-by-piece price breakdown of each of the new Android slate’s components.

Heavily subsidised, with Amazon hoping that the thorough integration of their Kindle and gift store will make up the loss, iSuppli note that all components are extremely cost effective.

“All the choices have been made here to minimize the hardware cost,” said iSuppli analyst Andrew Rassweiler.

“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.There was a cheaper one with fewer features that saved them a few bucks.”

The pricing model seems to be paying off too; Amazon are reporting strong pre-order sales, while thrid-party sellers are seeing the slates fly off their stores. Things are going so well that Amazon have already lined up the next major production run of the units.

Via: All Things Digital