first_imgWhen rumors began heating up about the Kindle Fire prior to its launch, one thing that seemed like a lock was its price. Amazon was going to sell the Kindle Fire for “hundreds less” than the iPad. After its official coming out party, we now know those rumors were spot on: the Kindle Fire is available to pre-order for just $199.Indeed, that price is hundreds less than the iPad and the Kindle Fire is already an Amazon best seller. But how can Amazon do this when every other big-name Android tablet on the market sells for four or five hundred dollars? The immediate assumption was that Amazon is willing to take a loss on each Kindle Fire sold — as much as $50 — and make up the difference with future content purchases from its marketplaces.Now, however, an updated analysis of the Kindle Fire parts list says otherwise. According to UBM Tech Insights, Amazon is going to do just fine selling the tablet at $199, even if a user never makes a single purchase. The estimated cost of its parts came in around $150, which leaves another $50 worth of wiggle room to cover research and development costs, marketing, and warranty coverage and tech support.UBM also notes that the cost is pretty well identical to the BlackBerry PlayBook, with the 16GB version costing around $170 to build. That certainly seems reasonable since it’s widely thought that the first Kindle Fire is a stripped-down PlayBook that was re-dressed in Amazon clothing.While it now looks certain that Amazon will make at least a small profit on each Kindle Fire sold, it’s the device’s potential for generating future sales that Amazon is really interested in. It’ll be curious to see what kind of numbers Amazon reports after the Kindle Fire’s first holiday season on sale — and how content sales stack up to those on the iPad.If you’d like to learn more about the Kindle Fire, check out our eyes on report from the Amazon Launch event.More at Light Readinglast_img

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