Kindle Fire HD cost estimated at $207, share of hardware being $147

Amazon apparently taken a stand as far Kindle Fire HD is concerned. It does not seem to mind incurring losses as long as it means the customer base keeps growing.

IHS reports that the material and production costs for the low end version of Kindle Fire HD  which has a 7 inch display, 16GB memory and allows only wi-fi wireless; hovers around $147 add to that expense like software, licensing and royalties and the device’s estimated cost surges to $207. This model is currently on sale on Amazon for $199.

Amazon is undeterred by these statistics. The CEO of Amazon Jeff Bezos said at the launch of Kindle Fire Tablets that they want to make money when people use their product as opposed to when people buy it.

Despite all the numbers what works in favor of Kindle Fire HD, at least financially speaking, is that its production costs are relatively lower than the production costs of Kindle Fire.  They have managed to save on the display though the resolution of the Kindle Fire HD is much higher and have managed to save on the touch screen technology used.

Amazon has increased their profit margins on an increase in memory, which we would like to point out is quite like the module embraced by their biggest competitor – Apple. In the Kindle Fire HD with 8.9 inch display there is $50 difference between the 16GB and the 32 GB versions. This increase doubles to $100 in the 64GB version.

Though Amazon has managed to offer better technology at lower costs, whether their we-don’t-mind-the-loss-as-long-as-our-product-picks-up attitude will see them through in the long run is still a matter of concern.