Unlike the Kindle Fire tablets, Amazon’s Fire Phone retails for a fairly high price. It currently runs $199 with a two-year contract and $649 without a contract, rubbing shoulders with the likes of Samsung’s Galaxy S 5, Apple’s iPhone 5S, the HTC One, etc. For a company that thrives on getting customers into its ecosystem, the Fire Phone has a pretty high barrier for entry, unlike the other hardware Amazon sells. As it turns out, though, Amazon has to sell the phone for a higher price because the device itself costs quite a bit to make.
According to a recent teardown and analysis of the device, Amazon spends about $205 on materials to make a Fire Phone. It features pretty standard components, including a Qualcomm Snapdragon processor and several other pieces, and a 720p screen that costs about $27 to make. (compare that to $43 for the iPhone 5S screen and $63 for the GS5 screen)
The biggest standout components are four sensors that allow the user to control the phone by tilting their head. It’s one of Amazon’s biggest selling points of the device, and it turns out it’s likely some of the most expensive pieces of the phone, too.
With the device selling for its current price, the margins on the phone are pretty heavily in Amazon’s favor. That doesn’t factor in the cost of research and development, or giving away years of Prime service to buyers, but it does show Amazon wasn’t willing to eat a loss just to force customers onto the Fire Phone. Whether that’s a winning strategy or not remains to be seen.
Have you considered purchasing a Kindle Fire Phone?