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iPad Mini Costs $24 More To Make Than Kindle Fire HD

Posted by timothy on from the price-theory-at-work dept.

sweetpea86 writes "... but retails for $130 more. Teardowns of the Apple iPad Mini and the Amazon Kindle Fire HD have revealed that the two devices cost almost the same amount to manufacture, despite the retail prices being significantly different. Andrew Rassweiler, senior principal analyst of teardown services for IHS iSuppli, explains that Apple is sticking to the premium brand strategy it has always used for its media tablet and smartphone products, whereas Amazon is banking on content."

4 of 260 comments (clear)

  1. Few things by SquarePixel · · Score: 5, Insightful

    First of all, Apple makes its own OS and applications while Amazon just uses Android. On top of that Amazon has always tried to keep their price down so they can sell more ebooks. Apple tries to make profit by selling their devices. These two things combined, I don't think the $100 price difference is that much. It's almost surprisingly low.

    1. Re:Few things by jellomizer · · Score: 5, Informative

      It was ranked at -1 because, most people don't understand how businesses run.

      Do you sell the razors or give away the razors and sell the blades.
      Do you sell a $500.00 Ink jet Printer with $10.00 cartridges. Or do you sell a $99.00 Ink Jet Printer and sell $30.00 cartridges.

      Why is it you get a $10.00 meal at KFC but for the same meal you need to pay $25.00 at say Applebees?

      There is more to the price then the cost of parts.

      --
      If something is so important that you feel the need to post it on the internet... It probably isn't that important.
    2. Re:Few things by Anonymous Coward · · Score: 5, Insightful

      1. We have iPhones and my kid (who will be the primary user of the device) is already accustomed to the interface

      2. The educational games/books we've downloaded for it are already there and ready to be synced.

      6. As an Apple (iPhones, Mini, and MBP) and Amazon customer (I'm a Prime member and use them for video rentals, most online purchases, etc), I simply preferred the Apple device even though it was considerably more money.

      YMMV.

      Apple's locked you into their ecosystem and you're paying double for the convenience. That was their plan.

  2. Why is this said with any implication of surprise by jeffmeden · · Score: 5, Insightful

    The $35 in extra cost turns into $130 at the consumer level. That's actually pretty much right for a manufactured good. You see, when someone makes a product they typically want to charge MORE for it than it costs to produce. This difference is called Profit. The more it costs, the more you must charge. Plus, it's apple. Even if it cost less, they are selling you the device plus the brand. Or did you think Phil Shiller worked for free?