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October 2011
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Kindle 4 Cost Breakdown

Recently Andrei managed to thoroughly break a perfectly good new Kindle 4 in his quest for ever more complete understanding of what’s going on inside our favorite devices.  The information and photos accompanying these posts got me thinking about Amazon’s new pricing gambit.  There’s a lot of focus right now on how cheap the Kindle Fire is being sold at, especially in light of the fact that recent reports have Amazon selling it at a loss, but nobody is really talking much about the fact that there is now a fully functional eReader connected to a major platform available for only $80.

Are they still making any money at all, or is this Kindle even more heavily subsidized than the Fire?  Let’s look into it a bit.  I’m not claiming any inside information beyond a working knowledge of searching the Internet, but what I found was fairly interesting.  The component list is based on the disassembly I mentioned:

  • 6″ E INK Display – ED060CF(LF)T1 REN60B7075(C62)
  • ARM Cortex-A8 CPU – MCIMX508CVK8B N78A 8TFC1130E
  • WLAN 802.11 b/g/n – Atheros AR6103T-BM2D 26AR0620.142D PAF284.1B 1126
  • Flash – SanDisk SDIN502-2G
  • Memory – Hynix H5MS2G22AFR E3M 129A
  • E INK Controller(?) – Winbond W25Q40BV
  • Power Management Chip – Texas Instruments SN92009 A4 TI 18IG2 AOR5 G4
  • Battery Controller – Freescale MC13892AJ CQQD129D
  • 30 Day Lithium Polymer Battery – 3.7V, 890mAh, MC-265360
  • Aluminum Case

Some of this was hard to find.  Other bits, like the Atheros AR6103T, don’t really seem to exist as far as the internet is concerned.  Where necessary I’m using best guesses, product families, and superficially equivalent parts for comparison.  After a bit of inquiry, here are the numbers I’m coming up with:

  • Display: $48 (Based on similar 6″ E INK Displays, no bulk pricing calculations)
  • CPU: $13
  • WLAN: $6 (Based on Kindle Fire breakdown by iSuppli. May be cheaper here since performance matters less)
  • Flash: $2.50 (Assuming similarity with previous models)
  • Memory: $1 (Researched as low as $0.01 in bulk orders.  Rounding up)
  • E INK Controller: $9
  • Power Management: $4 (Assuming similarity with previous models)
  • Battery Controller $3.50 (Rounding up from $3.32/1000 units.  Probably cheaper in batches of millions)
  • Battery: $3
  • Case: $5 (Assuming slightly more expensive than older Kindle models based on materials used)
  • Manufacturing Costs: $8 (Based on iSuppli Kindle Fire breakdown)
  • Other Materials: $10 (I’m sure I missed something)
    • Total Costs: $113

Given that I have done my best to be extremely conservative in these estimations, this should probably be considered an upper limit of the actual device costs.  Amazon will probably be quite a bit better at finding component discounts at this point than I am after my 48 hours or so of experience.  Even so, given that the basic model with no Special Offers integration is going for $109, I think I got pretty close.

One of the biggest things that I think we have to keep in mind with this new Kindle is that there is every indication this device is not meant to be serviced under any circumstances.  According to multiple reports so far, it is almost impossible to open the case without damage even if you know exactly what you are doing.  Even if that is accomplished, there was more glue used in this Kindle than makes sense.  It is clearly not meant to be serviced, either by customers or by Amazon themselves.  That means it has to be cheap enough for outright replacement of the hardware in the case of necessary servicing, with salvaging of little more than the E INK screens likely.

With this information, I think it is safe to say that Amazon won’t be throwing any money down a hole by subsidizing the Kindle 4.  They have gone above and beyond to build a new generation of the line that is far more cost effective than before while still offering maximum reading functionality.  Some money was definitely able to be saved by the exclusion of audio and touchscreen capabilities as well, of course.

The largest expense remains the E INK screen, but since this is the essential component of what makes a dedicated eReader worth having, it is hard to underestimate the importance.  You really can’t do without it and as yet I haven’t heard of any worthwhile substitutes.  For the moment this may mean that any further price drops will rely on the success of Kindle-based advertising.  With the baseline model already available for under $100, though, there’s not really much room left to complain about price.

Verdict: Amazon doesn’t loose money on Kindle 4 non-touch. Even with retail component prices, manufacture costs come very close to what device sells for. Kindle with special offers has been around for a while so it is safe to assume that Amazon know how much money they are going to make from advertising in the long run and it is reflected in $30 discount and the fact that you can remove special offers from your device for the same price of $30. It also seems that there is still room left for price reductions in the future.

Free Kindle Book – Rain Song by Alice Wisler

Rain Song is Alice Wisler’s first novel.  She has since written several others that I have yet to read, but intend to.  Wisler grew up in Japan, but now resides in North Carolina.  You’ll find elements of Wisler’s own life woven throughout this book.  For a limited time, Rain Song is free on the Kindle, and is in the top 20 of the Kindle Top 100 free books list.

Rain Song is thought provoking, with a relaxed, conversational tone.  If you want action and suspense, you might want to consider something different.  It is a curl up on the couch on a rainy day with a cup of tea type book.  Rain Song is set in Mt. Olive, North Carolina, and the main character is Nicole Michelin, a 31 year old middle school English teacher.

The book is about overcoming fears and getting what you truly want from life.  Rain Song also focuses on Nicole’s relationship with her family, particularly her close relationship with her grandmother and her young cousin.

Nicole was born in Japan and lived there until tragedy took the life of her mother. She has an extreme fear of flying.  Nicole fights to overcome her fears of flying as she develops a special relationship with Harrison Michaels, a young man living in Japan who responds to her columns on a fish website.  You’ll discover how Harrison plays an important role in his connection with her time in Japan.

When striving to overcome fears, it is important to keep your eyes on what’s on the other side.  Nicole had the choice of whether she wanted to let her fear of flying run her life, or face it head on in order to have the ability to get the things she truly wanted.

It took me a little while to get into Rain Song, but I liked reading from Nicole’s perspective, and her thoughts and interactions with her family and peers.  I also enjoyed learning a little bit about Japanese culture.

Dana Lorelle

“This is one of those books that makes me grateful for public libraries — because if not for a display of this author’s books in honor of her coming booksigning in our town I would never have stumbled upon this little gem. It is a deceptively simple book — on the surface the plot would take about three lines to summarize and the characters an equal amount of text. Yet swimming beneath that is depth of thought, of feeling, of description. It’s one of those books that makes me question the separation between the narrator and the author herself because the main character is so real, except that the author has published multiple books. The realism of her narrator, then, speaks to talent and imagination — as does the book itself. “