The IHS iSuppli Teardown Analysis Service recently revealed that the Amazon Kindle Fire, is selling for $10 more than the cost to produce the device. The cost of materials is $191.65, after manufacturing the total comes to $209.63 and the selling price is $199.99. However, this is exactly what Amazon wants, they plan on competing with the IPad and other tablets by offering the lowest price on the market.

As Liesl Bellack stated the Kindle’s point of difference is its competitive pricing.

However, I think that its very dangerous for Amazon to depend on only its content sales. Much like the Lieber Case, trying to fight off competition by only price will be a bigger hindrance on the company in the long run. The Kindle offers less than half the applications the IPad does, so consumers are rightfully paying only half the price of the IPad. The competitive pricing isn’t a strong enough point of difference for the Kindle Fire to rely on. I don’t think Amazon has created a product that will emerge as a serious threat against the IPad.

Citations:

Slatter, Brennon. PCWorld. Oct 4, 2011. October 5.2011. <http://www.pcworld.com/article/241076/kindle_fire_teardown_pegs_price_at_20963.html>

Picture:

Reardon, Marguerite. CNET News. September 29, 2011. October 5, 2011. <http://www.pcworld.com/article/241076/kindle_fire_teardown_pegs_price_at_20963.html>