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The True Cost of Kindle 2

Posted by ctitanic on April 22, 2009 – 11:20 am  Share
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According to BusinessWeek, the real cost of building a Kindle 2 is around $185 but Amazon charges users 48% more, to be exact $359, 

A teardown analysis of the Kindle 2 by market research firm iSuppli estimates the cost to build the device at $185.49, or about 52% of its retail price of $359. ISuppli takes apart consumer electronics to identify the manufacturer’s suppliers and estimate the cost of the device’s components, providing a rough idea of the profit margin for each unit sold. Amazon declined to comment on iSuppli’s analysis.

Via:  BusinessWeek

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ctitanic (735 Posts) - Website | Twitter | Facebook

Working as IT Professional since 1994. IT Manager since 1999. Microsoft Most Valuable Professional in Tablet PC/UMPC since 2007. Owner/writer of www.ultramobilepc-tips.com . Published many articles in todoUMPC Magazine, www.todoUMPCmagazine.com, the first online magazine all about UMPCs. Maker of Tweaks2K2, a registry hacking tool for Pocket PC devices (www.tweaks2k2.com).


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  • According to BusinessWeek, the real cost of building a Kindle 2 is around $185 but Amazon charges users 48% more, to be exact $359

    Technically, Amazon charges over 94% more than the $185 build cost. ($359-$185)/$185 = .9405405...

    I knew the math portion of my degree would come in useful one day. :D

    Steve
  • The fact that you don't have to pay for connectivity *ever* might have something to do with this.
  • doog
    Compared with other analyses that iSuppli has done, that seems like a pretty low gross profit percentage, actually. When you add marketing costs, warehousing, packaging, etc., (as well as the cost of WhisperNet) that's not a huge margin percentage. I'm going to guess, though, that component costs will go down in the future, while the cost of the device remains relatively the same.
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