Amazon sells Kindle Fire at $56 above cost

Teardown shows the total bill of materials to be around $143.

Kindle Fire started shipping early this week and UBM Techinsights have already performed the initial teardown of the new Kindle exposing the heart of it: A dual core OMAP processor from Texas Instruments.

UBM values the total of all the parts including Wi-Fi, flash, DRAM and a 7” display at $143.

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With a selling price of $199 this means that Amazon actually has a margin of $56 from which you obviously have to subtract shipping and handling.

This is much better than many have believed as it has been widely rumored that Amazon was actually selling Kindle Fire at a loss and would make up for it by selling downloadable contents for the tablet.

The inclusion of the OMAP processor should be seen as a major design win for Texas Instruments in a time where the company is shifting its main focus to analog chips and have been rumored several times to trying to rid itself of the processor business.

With the depressed economic situation it is probably a safe bet that TI would want to hold on to the division until it can fetch a better price on the market.S|A

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