Thursday, October 13, 2011

K4 Cost less than $113 to make

Kindle Blog has done an estimate of the parts in the new K4. I'll let you read the link for details.

But the blog is conservative. I see, of the $113 cost:
Amazon should be getting a 40% to 60% discount on the screens. Let's round that to a savings of $18 less than estimated.

$13 for a CPU is a *much* higher end CPU in volume than an ARM A8. For $13, Amazon should be getting a 1.0 to 1.2 Ghz A9. A further $5 in savings (or so) in high volume.

Many of the other chips are overpriced by a bit here and there. Recall, Amazon is buying in multi-million unit quantities. They do not pay list nor fleet price. The vendors negotiate far lower pricing. I estimate another $8 in savings.

Or $113 - $18 - $5 -$8 = $82

For something that sells for $109 (sans special offers), I suspect Amazon is making a small profit out the door.

Oh, e-ink pricing will drop. Now that there is the 'Kindle Fire,' e-ink knows they must be competitive or Amazon will make the tablet cheap enough to start displacing e-ink sales.


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