Amazon’s $79 Kindle costs $84 to make?

We all know that Amazon is going to lose money with the sales of its upcoming Kindle Fire tablet, and will have to make it back through all the content that its customers purchase with the tablet, but did you know that the Kindle Fire isn’t the only device that Amazon is selling at a loss? According to a report from mainstreet.com, with the help of iSuppli, they managed to figure out how much it costs Amazon to create the $79 Kindle.

While the materials cost an estimated $78.59, the manufacturing cost is said to be $5.66, which brings the total material and manufacturing cost to $84.25. But to be fair, the $79 Kindle does come with ads and special offers that help to alleviate a bulk of the subsidized costs, and the $99 Kindle (without ads) means the company isn’t making a loss from those tablets.

However, this is of course assuming the estimated cost of the eBook reader is on the dot – for all we know, Amazon could be making a profit from hardware sales with the $79 tablet or it could be making a loss with the $99 tablet. What do you think of Amazon adopting the console sales model for its Kindle hardware?

George Wong
Categories: Tablets
Tags: Amazon, ebook reader, Kindle