Is Amazon Get Big Profit from Kindle Fire HD 7 inch Multimedia Tablet

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Kindle Fire HD 7 inch MBOMAs you may already know Amazon has released their 7 inch Kindle Fire HD tablet in UK, Germany, US and Canada for price around of $199 or £159 and the latest generation of Amazon tablet has become one of the best seller 7 inch tablet in Amazon. Comes with 7 inch HD IPS (In-Plane Switching technology) display, dual core processor as the heart of the device with integrated Imagination PowerVR 3D graphics and dual band 802.11 a/b/g/n WiFi with MIMO accelerator technology (dual antenna), the Kindle Fire 7 deliver great multimedia and entertainment experience. We believe you will thinking if Amazon will gets much profit from the device, but are you know how much its cost to produce this tablet?

Yeah, Amazon Kindle Fire HD 7 inch is one of the best multimedia tablet that can you get for price under $200. It also has lower price than Samsung Galaxy Tab 2 tablet which has price tag at $239. The fact is Amazon need $165 to produce the tablet. With extra $9 for manufacturing cost, the total manufacturing bill of materials (MBOM) is $174, which mean the company only get a profit of $25 from each device.

The biggest cost is the 7 inch touch screen display. Yeah, the 7 inch Capacitive IPS multi touch screen display from Samsung that capable to playing 720p video content and support maximum resolution display of 1,280 x 800 pixels carried a cost of $64 or around 36.7 percent of the MBOM. On the top of display, the 1.0 Mega Pixel front facing camera display with BSI sensor cost $2.5, while the 4,400 mAh Lithium Polymer battery that provides up to 11 hours of battery life cost $15.

The other big cost is the flash memory and RAM. For both of 16GB of NAND Flash memory as internal storage and 1GB of LPDDR2 RAM, Amazon spend $23, while for the dual core of OMAP4460 processor that offers a base clock speed of 1.5GHZ, the company need $16.5. Andrew Rassweiler, senior principal analyst of teardown services for IHS said, “Amazon’s strategy with the Kindle Fire HD 7-inch tablet is not really to make money on the hardware itself. Rather, the idea is to create a product at a compelling price point and then get a lot of consumer traction in order to put Amazon content and the Amazon online store into consumers’ hands.”

The other costs are a power management carried cost of $7, for box is $3, $12 for connectivity (802.11 a/b/g/n WiFi with MIMO and Bluetooth) and other cost is $22. The guys from IHS also said, “However, these features allow Amazon to offer a better feature set for less cost than the last version of the Kindle Fire, while maintaining the ‘magical’ $199 entry point at retail.” Yeah, for price only at $199, the 16GB of Kindle Fire HD 7 inch is worth for your money.

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