Amazon’s Kindle 2 e-book carries a price tag of $360 but it costs the company far less to build, says research firm iSuppli.
A teardown analysis of the Kindle 2 puts the device’s price tag at $185.49 for materials and manufacturing costs. Components alone cost $176.83, and the rest stems from manufacturing expenses and the battery, says iSuppli. The bill of materials cost does not include cost of intellectual property, software, royalties and licensing fees.
The combined manufacturing and materials costs represent 51 percent of the Kindle 2’s retail price.
Amazon launched an updated version of the Kindle, the Kindle 2, in February this year. The Kindle 2 is slimmer and claims longer battery life than its predecessor but is based on the same E Ink display technology.
Not surprisingly, the display accounts for the biggest chunk of the device’s cost. iSuppli estimates that $60 or 41.5 percent of the materials bill is a result of the E Ink display.
The next most expensive component in the e-book reader is the wireless broadband module provided by Novatel Wireless. The $39.50 module accounts for 27.3 percent of the materials cost of the Kindle 2.
In the first-generation Kindle, the wireless functionality was provided by an integrated chipset that was part of the main printed circuit board, says iSuppli . In the second-generation device, the wireless functionality is separated into a module and is no longer part of the core chipset.
The move makes Kindle 2 easier to design and gives Amazon greater leverage while negotiating with suppliers, says the research firm.
Other components in the Kindle include Qualcomm’s single-chip baseband processor and Freescale Semiconductor’s multimedia application processor.
See also:
Kindle 2’s Fuzzy Fonts Have Users Seeing Red
Wired Review of Amazon Kindle 2
Kindle Readers Ignite Protest Over E-Book Prices
Photo: Kindle 2 (Zack Klein/Flickr)
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