That jaw-dropping $US79 price point on Amazon’s new Kindle just got a little nuttier: It turns out the thing costs a $US84.25 to manufacture, according to an exclusive report to Mainstreet by serial gear teardowner iSuppli.
The $US79 Kindle is the “special offers” version of Amazon’s ereader, which means it features localised advertisements on its lock and home screens. The non-special offers version of the same model costs $US109, so Amazon probably isn’t losing money in the longview. But the $US84 figure ($US78 materials) also only covers the costs up to the end of the assembly line, so additional costs like shipping and software would bump the total figure even higher.
Don’t forget, though, that gaming companies have been losing money on consoles for years, eating the cash on each system they sell to get users into their ecosystems. There’s no bigger ecosystem than Amazon’s, and the console model has been tossed around as a way Amazon could drive down prices before. Still, it’s a really bold move, and refreshing in the world of insane hardware margins we see a lot of the time. [Mainstreet via Techmeme]