Amazon may be selling its Kindle Fire tablet at loss according to recent reports. IHS iSuppli said the components that go into the Kindle Fire cost $191.65. Additional manufacturing expenses bring the total cost to $209.63. The Kindle Fire goes on sale in the US for $199.
Based on IHS iSuppli’s estimates, the company may lose just under $10 on each Fire it sells. However Gene Munster, an analyst at PiperJaffray, estimated that Amazon would lose roughly $50 on each Kindle Fire sale.
Amazon is hoping the device encourages users to buy more products and services from the company, making up for the upfront losses, according to Wayne Lam, an analyst at IHS iSuppli.
The Amazon Kindle Fire tablet runs a customized version of Android operating system which prevents it from running Honeycomb apps or from buying software from any Android store.
The Amazon-centric Kindle Fire offers access to the Amazon Appstore(over 10k apps), Amazon MP3(17 million songs), the Kindle bookstore(1 million books), Amazon store, and other Amazon streaming services(100k movies..etc).[Source 1]– Reuters [Source 2]– Apple Insider