The teardown experts at market research company IHS iSuppli have taken their tools to the hot new Kindle Fire tablet and found that Amazon is definitely selling the devices at a loss. The Fire, which retails for $199, apparently costs near $202 — $201.70 to be exact — to make.
That’s no surprise, since the company already loses money on its Kindle e-reader tablets (especially now that they start at $79), making its profit from the media and other goods that users buy through the devices. The Kindle Fire is particularly good for this, as it comes with a free month of membership to Amazon’s Prime service, which normally costs $79 per year. Amazon has a good chance of getting a lot of new subscribers hooked on its on-demand video, limited lending library and shipping discounts through the tablet.