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Kindle 2 Tear-Down Reveals Price of Components
adeelarshad82 writes "Amazon's wildly popular Kindle 2 got a good old fashioned tear-down from the folks at market research firm iSuppli. According to the organization, the Kindle 2's manufacturing cost is almost half as much as its retail price."
It's not like Amazon somehow magically doesn't have any overhead, shipping or design costs for the Kindle. They also have inventory costs, returned item costs and all the other gunk associated with manufacturing and selling an item.
Having merely a 50% of the cost (not including IP) for a still pioneering device like this seems totally reasonable.
Lets not also forget that Amazon pays not only for the bandwidth to deliver all that content, but also pays for the Wireless data service for EVERY unit out there, perpetually.
You do know that Kindle was sold-out for the longest time, since production couldn't keep up with demand?
They have no need to increase the sales at this point.
Also: there are very real dangers in lowering price for products; human mind tends to consider more expensive products as better, higher-quality things.
Conversely, lowering price can dillute the brand.
So there is very little point for Amazon to reduce the price significantly at this point.
Let me fix that one more time for you.
It's the Ferengi way.
Which proves the fix above you is correct, not yours, as according to Rule 284 of the Rules of Acquisition:
Deep down, everyone's a Ferengi.
---- Liquid was a patriot ----