Actually, the Fire isn't going to cost Amazon as much as early analyst predictions. The online retailler managed to secure some budget components, using procurement advantages, meaning although the tablet is still subsidised it won't cost as much for the company.
Up against Apple and the iPad - though at a far cheaper price point - Amazon has stuck a lower capacity battery into the Fire than Cupertino's product, or even RIM's Playbook. Its got basic 4Gbits of low-power mobile DRAM, according to IHS, compared to newer smartphones on the block which tend to run at 8Gbits.
The Fire's battery capacity runs at less than RIM's PlayBook, which has 20 Watt-hours, and the iPad 2 which has 26 Watt-hours. Amazon's product sits at roughly 16 hours.
Other tricks to keep the price down, says IHS, include the teeny 7-inch display, eschewing 3G and 4G, and using plastic and stamped components instead of aluminium. In fact, the Fire won't even have the magnesium found in the cheap-as-chips regular Kindle.
Amazon also decided against a wireless module which would integrate WLAN, Bluetooth and FM radio, plumping for a WLAN-only model from Jorjin. It's based on Texas Instruments' WL1270, which is a WLAN only chip that has made few appearances in the wild.
Still, IHS predicts the suppliers are going to turn quite the buck from the Fire, in particular Texas Instruments. Because TI won contracts for all of the major integrated circuit slots, it should benefit from $24 worth of TI design for every Fire flogged.
*Update IHS has updated its bill of materials outlook. Preliminary figures suggest that, including manufacturing service expenses, the cost sits at $201.70. The BoM by itself is $185.60, slightly trimmed down from September predictions of $191.65 and $209.63 in total.
The most expensive part of the Fire is its display, which runs into $87 or 46.9 percent of the full bill of materials, making use of E Ink Holding's FFS technology as licensed by LG Display.
It's got 8 gigabytes of eMMC NAND flash memory, says IHS, which looks to have been supplied by Samsung. Elpida supplies the 4 gigabites of DRAM, meaning the memory cost $22.10 or 11.9 percent of the bill of materials.