When Amazon first announced plans to release its Kindle Fire tablet earlier this week, it also revealed that the price of the tablet would be $199. That caused one financial analyst to state in a note that Amazon would be losing $50 for each Kindle Fire sold. Now a new report from iSuppli.com claims the opposite, saying that after checking out the components used to make the Kindle Fire, Amazon could actually generate a small profit from each sale of the tablet.
The report claims that it has estimated the price of the parts needed to make the Kindle Fire and concluded that the parts budget would be approximately $191.65. The actual manufacturing of the Kindle Fire raises that price up to $209.63. Even though this is nearly $10 over the price that Amazon is selling the Kindle Fire for, iSuppli.com claims that it is also adding the fact that users of the tablet will also be purchasing digital content for the tablet. Thus, the report claims that Amazon will actually generate a small $10 profit from the sale of each Kindle Fire.
ISuppli.com also says that the real sales benefit of the Kindle Fire won't be from sales of the tablet or from sales of digital content made for the device. Rather, it claims that the product "will serve to promote sales of the kinds of physical goods that comprise the majority of Amazon's business." It adds, "If doing this means that Amazon must take a loss on the sales of digital content and tablet hardware, it will be well worth it in the end."