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Research firm: Kindle Fire tablet costs $201.70 to make; Amazon takes $2.70 loss

By: Peter Svensson, The Associated Press

Posted: 11/18/2011 8:33 AM | Comments: 0 | Last Modified: 11/18/2011 9:26 AM

FILE - This file photograph taken Sept. 28, 2011, shows the Kindle Fire at a news conference, in New York. Research firm IHS said the Amazon.com Inc.'s Kindle Fire tablet, which started shipping this week, costs $201.70 to make, $2.70 more than Amazon charges for it. (AP Photo/Mark Lennihan, File)

NEW YORK, N.Y. - Research firm IHS say Amazon.com Inc.'s Kindle Fire tablet, which started shipping this week, costs $201.70 to make, $2.70 more than Amazon charges for it.

The analysis indicates that Amazon is, at least initially, selling the tablet at a loss that it hopes to cover through sales of books and movies for the device. The manufacturing cost of a new gadget usually comes down over time as chips decline in price.

Amazon CEO Jeff Bezos told The Associated Press in September that company's goal was to make a small profit from the hardware, but as a retail company, Amazon was willing to make a smaller profit than most electronics companies would.

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