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Kindle 2 Tear-Down Reveals Price of Components 169

adeelarshad82 writes "Amazon's wildly popular Kindle 2 got a good old fashioned tear-down from the folks at market research firm iSuppli. According to the organization, the Kindle 2's manufacturing cost is almost half as much as its retail price."
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Kindle 2 Tear-Down Reveals Price of Components

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  • by EZ Erik ( 855609 ) on Wednesday April 22, 2009 @04:04PM (#27678331)
    Iphone has a higher markup percentage: []
  • Re:Shocker! (Score:5, Interesting)

    by Linker3000 ( 626634 ) on Wednesday April 22, 2009 @04:22PM (#27678569) Journal

    Back in the days of the C64 'me and the gang' looked at the cost of duplicating a commercial ROM cartridge copier plug-in board (for our own use - not to re-sell). I could do the the electronics, someone had the PCB making kit etc.. but when we added up all the raw costs, we were disappointed to find out it was cheaper to buy the item off the shelf!

  • Apparently... (Score:4, Interesting)

    by brian0918 ( 638904 ) <> on Wednesday April 22, 2009 @04:30PM (#27678667)
    Apparently, the folks at iSuppli subscribe to the socialist notion that the men of ideas are of no importance. Obviously, if you just take all the parts and throw them in a box, they'll magically form a Kindle.

    This reminds me of a story from a WSJ article from 1974, about the nationalization of plants in Chile, quote in Ayn Rand's Philosophy: Who Needs It []:

    Among them was Dow Chemical Company, which owned a plastics plant in Chile. Bob G. Caldwell, Dow's director of operations for South America, came with a technical team to inspect the remains of their plant. "'What we found was unbelievable to us,' he recalls, 'The plant was still operable, but in another six months we wouldn't have had a plant at all. They never checked anything.' ....Worse yet, the highly inflammable chemicals handled at the plant were in imminent danger of blowing up. 'Safety went to pot,' Mr. Caldwell says. 'The fire-sprinkler system was disconnected and the valves taken away for some other use outside. Then they were smoking in the most dangerous areas. They told us, "You didn't have any fires while you were here before, so it must not be as dangerous as you said."'"

  • by jollyreaper ( 513215 ) on Wednesday April 22, 2009 @04:35PM (#27678751)

    This is usually the way of things. Wanna hazard a guess as to how much food costs at your favorite restaurant? I can guarantee your $12 entree didn't cost even half that much for them at the wholesaler. But the gross on that ain't anywhere near the net. If you want to talk about a contemptible outrage, you're talking about BS like components getting marked up 4x at the big box retailers. Yeah, you get the printer for cost and the $2 data cable for $20.

  • by g0at ( 135364 ) <ben@ z y g> on Wednesday April 22, 2009 @04:36PM (#27678767) Homepage Journal

    Seriously, why does this company keep getting its name into headlines? Who gives a shit what they feel a bunch of components might cost? Come on, shills. This is a do-nothing company that pisses its pants for publicity, and places like the Mac rumors sites and Slashdot lap it up and parrot their squawkings.

    It requires no more than a grade-school education to understand that the price to design, manufature, market, support and service a product is greater than the sum of the wholesale cost of its physical components.


    Take this stupid company with their silly name out back, shoot it, and don't mention it again.

  • Re:Really.. (Score:3, Interesting)

    by ausekilis ( 1513635 ) on Wednesday April 22, 2009 @04:38PM (#27678795)
    I used to work in a shop that sold music equipment. The cost to the business would be approximately 1/2 to 1/3 of MSRP, so even a 45% off "sale" would still net the shop some decent profit. Funny part was, there were slower moving items (like guitars/keyboards/drums) that had MSRP around 200% of cost, and faster moving items (like strings, sticks, cables) that had MSRP around 250-300% or higher.

    That's right, for a fast-moving item that cost us $1.50, MSRP would be $8, we'd advertise for $6. The best part? If I knew a customer and they were kind, they'd get them for more like $3. If the customer was a dick and asked for a discount, he'd get it for $5.50, oblivious that the dude in front of him paid half that.

    In the case of the Kindle, Amazon is (presumably) the manufacturer as well as the distributor, so the margins can be different. I couldn't tell you exactly what the cost to actually *make* a guitar might be with respect to the distributor's cost, though we can see they're still in business so they must have another markup somewhere.

You know, Callahan's is a peaceable bar, but if you ask that dog what his favorite formatter is, and he says "roff! roff!", well, I'll just have to...