Amazon Losing $50 Per Kindle Fire?
With its new Kindle Fire tablet, Amazon is clearly undercutting Apple’s iPad on price. At just $199, the Fire costs less than half of Apple’s entry-level iPad. An appealing price point, but one that requires Amazon to eat a few dollars on each sale. According to Piper Jaffray analyst Gene Munster, “Amazon is likely losing about $50 per Kindle Fire.” Munster doesn’t bother to explain where he gets that number. He does, however, note the disparity between that loss and the 30 percent-plus gross margin Apple makes on the iPad.