BoM Suggests Amazon (AMZN) Takes Hit on Each Kindle Fire Sale
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Amazon (Nasdaq: AMZN) is taking a hit on it's new Kindle Fire media tablet, but is looking at the long-term profit picture and liking what it's seeing.
According to IHS (NYSE: IHS) iSuppli, Amazon's Bill of Materials (BOM) equates the base cost at $209.63, or about 5.3 percent more expensive than the $199 price it's selling for on Amazon.com.
The most expensive piece, as might be expected, is the Display & Touchscreen, which come in at a staggering $87, or 41.5 percent of the total. The main PCB -- containing memory, WiLAN, and other items -- costs $70.40 to Amazon.
Fire's battery is priced at $18.25, the enclosure at $11.00, and miscellaneous box contents at $5.00.
Manufacturing costs on the unit averaged to $8.40.
Amazon is selling the tablet to generate more marketplace sales, and convert more into Amazon Prime members, which offers streaming TV shows and movies similar to Netflix (Nasdaq: NFLX). Profit margins on media are much more substantial.
Amazon is trading 1.3 percent stronger Monday morning.
According to IHS (NYSE: IHS) iSuppli, Amazon's Bill of Materials (BOM) equates the base cost at $209.63, or about 5.3 percent more expensive than the $199 price it's selling for on Amazon.com.
The most expensive piece, as might be expected, is the Display & Touchscreen, which come in at a staggering $87, or 41.5 percent of the total. The main PCB -- containing memory, WiLAN, and other items -- costs $70.40 to Amazon.
Fire's battery is priced at $18.25, the enclosure at $11.00, and miscellaneous box contents at $5.00.
Manufacturing costs on the unit averaged to $8.40.
Amazon is selling the tablet to generate more marketplace sales, and convert more into Amazon Prime members, which offers streaming TV shows and movies similar to Netflix (Nasdaq: NFLX). Profit margins on media are much more substantial.
Amazon is trading 1.3 percent stronger Monday morning.
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