I like to see people take a new gadget and then tear it apart so we can see what’s on the inside. Sometimes these teardowns are done so we can see if the gadget is easy to repair. Other times it’s to see if the device has hidden features. Sometimes teardowns are simply done to see how much a device costs to make.
The latest cost teardown comes from iSuppli and it is of the new Kindle Fire tablet. They tallied up all the parts inside and came up with a rough cost to buy the components of $185.60, then once your add manufacturing costs and margin expenses, that brings the total cost up to $201.70. The Fire sells for $199, so they are taking a small loss for each one sold. Presumably, they can afford a small loss on each one, with the hopes that users will purchase a bunch of content at a higher margin.
You can have to keep in mind that the cost doesn’t include any of Amazon’s overhead or marketing either. Granted the Fire hasn’t needed much marketing other than some ads on Amazon and the launch event to sell very well so far.