Amazon Kindle's Cost Analysis

Amazon has been selling a lot of Kindles lately despite the $359 price tag that used to turn people off a while ago. People have come to realize that Amazon Kindle allows them to save money on books and is well worth the money. But what is it worth to Amazon? According to industry experts, Amazon is making about $170 per each Kindle. That means Kindle’s profit margin is pretty healthy at this point. We have all been wanting to pay less for Amazon Kindle, but that wouldn’t be possible unless Amazon finds a way to build those screens for much less. The E-Ink technology does cost a decent amount of money and cuts into Amazon’s profits. No wonder we don’t have a color screen on our Kindles already.

The cost of wireless connection is another big part of the equation. You may think you are getting your wireless for free on Kindle, but in reality Amazon has already accounted for the cost. Amazon doesn’t want users to go overboard with their wireless connections, which is why it has introduced a set of guidelines to keep the door open for wireless fees in the future.

The bad news here is that we can’t expect Amazon to sell those Kindle 3.0’s for $100 or so. The good news is as Amazon gets more efficient with its Kindle productions, it could offer a decent discount on new Kindles. Experts have talked about Amazon having trouble producing affordable color Kindles. That would be finally possible when Amazon manages to bring down its production costs. The main question at this point is whether we will see a color-screen Kindle in 2009.