A Look at the Price of the Kindle Fire

The Revolutionary device from Amazon: the Kindle Fire Tablet will cost just $199 to buy. Tes you heard it right, a fully Android integrated tablet for only $199. Odds are you will have noticed the marketing campaigns for this sleek brand-new device already. .

How can they price the Kindle Fire Tablet so low?

But wait, how much really does the Amazon Tablet PC cost to build? Are we just getting a pile of junk for $199? How much of a earnings potential is Amazon. com getting due to their new tablet computer release?
Surprisingly Amazon.com is getting exactly ZERO gain from the new Kindle Tablet. Yup! They are selling each tablet at a loss.

Amazon spends about ten dollars more than they charge for the Kindle FIre, according to a written report by the institution IHS. To get a little bit more specific: Amazon. com invests over $209 dollars per Tablet and as a consequence loses 10 dollars and sixty three cents for each and every tablet they make.

Now $10.63 may not sound like a lot. Even though every little bit helps in these tough economic times. But when you think that it is likely that Amazon will end up moving tens of millions of these tablets, that price quickly becomes quite significant and equals hundreds of millions of dollars of losses.

Now don't go crying for Amazon.

This all means that getting your Amazon tablet is really a value for all of us. But the guys at Amazon.com are not dummies. They know a thing or two about marketing I think. They certainly have other ways to get their profits out of this.

So why would Amazon.com provide goods for a loss? The grounds for this is because the Amazon considers this cutting edge tablet a "Loss Leader". In case you have not heard the term, a "loss leader" is a piece of merchandise that comes at cost, or even sells for a loss of money that is used to stimulate gross sales of other types of items.

It works like this. People who purchase Kindle Fire Tablet PC will often also decide to buy additional goodies (at a nice profit per unit for Amazon). For example our new Kindle Fire user may decide to buy all sorts of tablet goodies:

• Kindle Fire Covers,
• Kindle Fire Stands
• Kindle Power Converters
• Extended Warrenty
• Kindle Fire "skins"

Nothing makes people buy these. But enough do to often cover the $11 loss and then some. But still...that is not the only reason Amazon sells The Kindle Fire tablet at a loss.

Arm the troops; Amazon is in a War

Yes, Amazon is in a war. No the reason for the war is not IPAD vs. Kindle Fire. The cause of the war is YOU. Yes you!

Amazon wants to be a primary distributor of content. They want this badly. What is a tablet after all except a means to display content. Games, MP3's, Streaming Video, Ebooks, Television programming and even cloud storage. Amazon offers all of these and at competitive prices. But they want to grow and dominate this market.

Because of this they offer the hardware at a loss. Hoping that you will come back to them again and again for content.

Do you have to buy content from Amazon? Of course not. they are betting many will, but they are smart enough to make their tablet (and content) as compliant as possible with every single format. This is why all Kindles have easily imported numerous types of files.

In many ways, the Kindle Fire Tablet and Amazon are coming up with something that you can use for a lifetime. Not just a Kindle Fire from Amazon life-time but your life span. Anyone could get this inexpensive tablet just to take advantage of the low price. Or use it (and the free cloud storage) as a great way to store your media for ages.

The choice is yours.