Whether Amazon’s
Kindle Fire proves to be the iPad challenger expected by pundits and analysts,
the next version of the tablet may already be in development: According to the
Taiwanese publication DigiTimes, the
online retailer is working on 8.9- and 10.1-inch models.
“Amazon is
developing 8.9- and 10.1-inch next-generation Kindle Fire models, and has
selected an 8.9-inch model for launch by the end of the second quarter of
2012,” read the Nov. 21 DigiTimes piece,
which cited unnamed sources. It also suggested that Foxconn had become “a
second original design manufacturer (ODM) of 7-inch Kindle Fire next to Quanta
Computer.”
The Kindle
Fire is not a tablet in the mode of Apple’s iPad or Samsung’s Galaxy Tab, whose
user interfaces center on grid-like screens of individual applications.
Amazon’s stated goal has been to build a device that seamlessly connects with
its voluminous stores of streaming video content, e-books and music. To that
end, the Kindle Fire’s user interface consists of a set of virtual “shelves”
lined with the user’s media and applications, as well as touchable links to
Amazon’s storefront. In many ways, that makes it more of a vending machine for
streaming media than a full-fledged tablet.
As a piece of
hardware, the current 7-inch Kindle Fire costs $201.70 to manufacture,
according to a recent preliminary finding by IHS Teardown Analysis Service.
Given the Fire’s price point of $199 (if that analysis proves correct), then
Amazon sells each unit at a slight but noticeable loss.
“Amazon makes
its money not on Kindle hardware, but on the paid content and other products it
plans to sell the consumer through the Kindle,” Andrew Rassweiler, senior
director of IHS’ teardown services, wrote in a Nov. 18 research note.
“This is a
similar business model to wireless companies such as AT&T or Verizon,” he
added. “They sell you a phone that costs them $400 to $600 or more to make for
a price of only $200. However, they expect to more than make up for that loss
with a two-year service contract.”
The screen is
one of the most expensive components of the current Kindle Fire, costing an
IHS-estimated $87, or 46.9 percent of its total bill of materials. If Amazon
decides to build future Kindle Fire devices with larger screens and upgraded
hardware, it could cost the company quite a bit more—but then, the retailer
would probably set a price for those tablets above its current level.
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