Analysis says $79 Kindle costs $84 to make

Nov 11, 2011

A recent analysis from IHS iSuppli determined that Amazon's $79 Kindle e-reader, which is the online retailer's cheapest Kindle thus far, costs $84.25 to make.

In the report, said the total cost of materials for the Kindle is $78.59, including $30.50 for the e-reader's 6-inch E-ink display. The estimates manufacturing costs run $5.66 per device.

IHS iSuppli notes that these costs don't include any of Amazon.com Inc.'s development costs for the Kindle, or costs related to things such as shipping and distribution of the device.

Even if Amazon pays more to build the $79 Kindle than it sells it for, the company has several other ways to bring in money from the device. This Kindle model includes ads that show up as screensavers and at the bottom of the device's home screen. And Amazon sees all the devices in the Kindle family - and the free Kindle apps it offers for and computers - as a way to spur more sales of its digital e-books, music, games and apps.

Amazon has repeatedly lowered the price of the Kindle and added more devices to the Kindle lineup since it began selling the first one in late 2007 for $399. The $79 version, which the Seattle-based company started selling in late September, eschews the keyboard found on earlier Kindle models. Amazon will begin shipping touch-screen Kindles ($99 to $189) and its first , the Kindle Fire ($199), later this month. Amazon still offers a Kindle that includes a physical keyboard, too.

Amazon has not said how many Kindles it has sold.

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Cynical1
not rated yet Nov 12, 2011
Reminds me of the inkjet model - cheap printer that us a LOT of expensive ink....
boznz
not rated yet Nov 12, 2011
@Cynical1 - Except kindle books are always a lower price than their paper equivalent.

Maybe once all paper books are out of print the price will go up but it seems an unlikely scenario, more likely real books will cost more once the economies of scale of lower print runs come into play.

Unless you really have to have paper books I don't see any real losers from the introduction of this technology
Fred_West
not rated yet Nov 14, 2011
They make a profit by selling it for a much higher price in other countries. The same product costs $140 in the UK.