As much as I want to stop buying dead tree books, Kindle’s price is still keeping me on the sidelines. And now that I really know how much it costs Amazon to build, I think I’ll be waiting for revision 3 or a fire sale.
iSuppli, which exists to make sure you’ll never lust after another iGadget the same way again, has taken a Kindle 2 apart and itemized what each component costs. Total: $185.49
The direct material cost of the Kindle 2, consisting of all parts used to make the product, amounts to $176.83. When adding in the conversion costs–i.e., manufacturing expenses and the battery–the total rises by $8.66 to $185.49.
According to the research firm, a little over 40 percent of the cost ($60) can be attributed to the e-ink display alone. The next largest component in terms of materials cost is the Novatel wireless module that accounts for 27.3 percent ($39.50).
Keep in mind, this is just materials cost. There are other costs to consider like overhead and paying for Sprint’s EVDO-powered Whispernet. Plus, don’t forget some room for profit. However, Jeff Bezos suggested recently on Charlie Rose (around 00:42:55 h/m/s) that growing the Kindle ecosystem was the priority at the moment. Though he admitted without disclosing figures that the Kindle sold “more than we expected.”
With iSuppli’s breakdown in mind, it kind of puts that interview in a new light. By the way, he goes into into computing at around 46 minutes and alternative energy at around 00:48:35.