Amazon is selling Kindle Fire for $199 and it cost them $209.63 to make

It cost Amazon $209.63 to build one Kindle Fire, which means that the company is loses $10 on each tablet sold by them.

Research firm IHS offers a rundown of the device’s components on its site. Materials for the Kindle Fire, which retails for $199, cost $191.65, but with factory expenses, that comes to $209.63. However, despite the apparent loss, IHS estimates that Amazon is “likely to generate a marginal profit of $10″ on each Kindle Fire sold, when you take into account sales of digital content with the device.

Component                                                    Cost

Display & Touchscreen                            $87

Main PCB                                                    $70.40

Memory                                                      $25

Apps Proc                                                   $15

WLAN                                                          $6

Other & Peripheral PCBs                         $24.40

Battery                                                       $18.25

Enclosure                                                  $11

Box Contents                                            $5

Sub Total                                                   $191.65

Device Costs                                            

Manufacturing Costs                             $8.40

EMS Margin                                            $9.58

Hardware Cost to Amazon                    $209.63

The researcher goes on to reason that Amazon doesn’t make a lot of money from Kindle sales or sales of digital content like ebooks and music. Instead, Amazon’s strategy is to lure more customers to buy higher-margin goods from its site. Kindle Fire, introduced this week, is selling at a price that’s lower than some had predicted. It’s also $50 less than Barnes & Noble’s Nook Color, its closest competitor.