Is Amazon losing money or earning a profit from the sale of each Kindle Fire tablet? Analysts seem to be at odds over that question.
In an investor note issued last Wednesday, Piper Jaffray analyst Gene Munster calculated the manufacturing cost of each Kindle Fire at $250, leaving Amazon with a $50 loss on each $199 tablet that it sells. Munster said he based that estimate on the cost of the iPad.
Related stories: Amazon could sell 5 million tablets next quarter Kindle Fire leads Amazon onslaught (roundup) Kindle Fire sets a new (low) price point for tablets Why Amazon's Kindle Fire is like a razor Amazon to lose $50 on each Kindle Fire, says analyst
But other analysts have chimed in with different opinions and estimates.
UBM TechInsights believes Amazon is actually making a profit on each Kindle Fire. Estimating manufacturing costs as low as $150, the research firm pegs Amazon's profit per tablet at $49.
In comparison, RIM spends around $170 to make its BlackBerry PlayBook tablet, which reportedly gave Amazon some "design clues" for the Fire. The retailer was able to cut its costs by eliminating certain features found in the PlayBook, according to EE Times, which is published by UBM's parent company.… Read more