With each Kindle Fire sale Amazon loses money, but not that much. On Thursday, iSuppli did a teardown, estimating it costs Amazon a $201.70 to make its tablet. The Wall Street Journal reports on Friday that the tablet only costs Amazon $203 to make. The two estimates put Amazon's loss on the tablet, which is priced at $199, in the $3 to $4 range before other expenses are factored in. That's still a loss, but a lot less than previously estimated.
The day Amazon revealed it would sell its tablet below a $200 price point, the blogger world wondered how on earth Amazon got it down so low. And then came the guesses. That very same day, investment firm Piper Jeffray estimated that with each Kindle Fire sale Amazon would lose $50. But he based that number on iPad costs -- not too scientific, especially since Amazon had cheap in mind. Two days later, a more precise method got that number down to about $10 per Kindle. iSuppli, the same firm that did the breakdown, did a more methodical analysis, breaking down pricing for each part. With manufacturing and shipping, those numbers led iSuppli to believe each Kindle Fire cost $209.63 before its more recent revision.