Amazon Built the Kindle Fire Cheaply By Design

By Mario Aguilar on at

The Kindle Fire is a huge deal in part at least because it's so cheap. But reports that Amazon is taking a loss to make the tablet a bargain have been greatly exaggerated. The Kindle Fire is inexpensive by design.

From the looks of it, the Amazon Kindle Fire is going to be amazing, and for only $200 (the equivalent of £130 -- though the UK price hasn't been confirmed as yet), it's a steal. How can Amazon offer what appears to be a seriously robust piece of technology at such a low price point?

Some speculate that Amazon is artificially lowering the price and taking a loss to entice buyers. But according to one analysis, the Kindle Fire is an excercise in calculated omission: Amazon stripped the Tablet down and carefully selected its hardware to shave dollars off the price tag. The Kindle Fire is Wi-Fi only, has a small screen, no camera, and an only 8GB hard drive. Amazon also used inexpensive components wherever possible to make the product much cheaper that its main competitor, the iPad. The Kindle Fire only costs $150 (£96) to make. That means you get a cheap tablet and Amazon still turns a profit. Clever. [Light Reading]