A LOSS: Research firm IHS says Amazon.com Inc.’s Kindle Fire tablet costs $201.70 to make — $2.70 more than Amazon charges for it. Not included are development, marketing and packaging costs.
MAKING UP FOR IT: Amazon can cover the loss through sales of books and movies for the device.
THE LONG TERM: The manufacturing cost of a new gadget usually comes down over time. Amazon says it wants to make a small profit, but was willing to live with a smaller margin than most electronics companies would.