Amazon spends $205 on every Fire Phone built


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?

source: re/code

About the Author: Jared Peters

Born in southern Alabama, Jared spends his working time selling phones and his spare time writing about them. The Android enthusiasm started with the original Motorola Droid and an unhealthy obsession with fixing things that aren't broken. This accidentally led to being the go-to guy for anything more complicated than a toaster, which he considers more of a curse than a blessing. Jared is enrolled in online classes at the University of Phoenix, and spends his spare time on video games and listening to music.

  • Chris Drummond

    well said jared I have amazon prime and own A kindle tablet. but I must say that paying 649.00 for what I think is A walking billboard and constant reminder to buy something just isn’t cutting it for me. I wish amazon good luck but just see failure on the sales. they need to rethink the price especially for prime members.