The Kindle Fire costs $209.63 to make, Amazon taking a loss for every device sold

We’ll be honest, we’re extremely curious how Amazon’s able to offer their 7-inch tablet, the Kindle Fire at such a rock-bottom price. It seems that the answer is pretty simple: Amazon is taking a slight financial hit with every device sold. IHS iSuppli estimated that the Kindle Fire cost $209.63 to make. Couple that with the associated shipping and handling cost to get the device to the hands of consumers, then it’s clear that the company is taking a big gamble with the Kindle Fire. To be fair, this is a common strategy for manufacturers to make – when the XBOX 360 and the PS3 came out, both Microsoft and Sony were also took hits, and sold their consoles at a loss, making up for it with licenses from developers to make games for their platforms. It’ll be interesting to see if Amazon’s device is able to stimulate sales of its digital content and physical goods in its store in the next few months.

Source: Reuters