Amazon Kindle 2 Costs $185.49 to Build

Per iSuppli the Amazon Kindle 2 ebook reader costs 185.49 in materials and manufacturing costs. The direct material cost, consisting of all parts used to make the product, amounts to $176.83. When adding in the conversion costs—i.e., manufacturing expenses and the battery—the total rises to $185.49. Not included in this analysis are costs above and beyond the material manufacturing of the core device itself—i.e., the cost of intellectual property, royalties and licensing fees; those not already included into the per component price—software, software loading and test, shipping, logistics marketing; and other channel costs.

The combined manufacturing and materials costs represent 51 percent of the Kindle 2’s $359 retail price.