Comparing Kindle Fire vs. iPad 2 is flawed without accounting for business models

There are many comparisons between the Kindle Fire and iPad 2 as a tablet.  With top issues like no camera, microphone, screen size, and lack of 3G.

Kindle Fire Review: 5 Things Amazon's New Tablet Is Missing

Posted 12:15PM 11/22/11Technology,Google,Apple,,Barnes & Noble

Kindle Fire Review: 5 Things Amazon's New Tablet Is MissingAs early adopters crack open their Kindle Fires this month, the rest of the country is watching. Is's (AMZN) new $199 gadget as good as the $499 iPad 2 or the $249 Nook Tablet?

After playing around with the Kindle Fire for a couple of days, I have no problem recommending it as a quality entry-level tablet. Money's tight this holiday shopping season, and if junior can be talked out of an iPad and into a Kindle Fire, then we're talking about a few extra bills that can be paid.

Analysis has the part cost of the $199 Kindle Fire to be $201.70.

Amazon Kindle Fire Costs $201.70 to Manufacture
November 18, 2011

Amazon’s Kindle Fire media tablet carries a BOM cost of $185.60, according to preliminary findings from the IHS iSuppli Teardown Analysis Service. When manufacturing services expenses are added, the cost increases to $201.70, as shown in the table below.

Amazon Kindle Fire BOM

This is slightly lower than the IHS virtual estimate of the Kindle’s cost issued in September of a BOM amounting to $191.65, and a total of $209.63, when factoring in the manufacturing and the margin expenses.

ISupply say the iPad2 cost $326.

iPad 2 Carries Bill of Materials of $326.60, IHS iSuppli Teardown Analysis Shows
March 13, 2011
With the second-generation iPad, Apple Inc. has held the line on the bill of materials (BOM), maintaining virtually the same costs as the first version of the device, an IHS iSuppli teardown analysis of the product has revealed. The 32GB NAND flash memory version of the iPad 2 equipped the with Global System for Mobile Communications/high-speed packet access (GSM/HSPA) air standard carries a BOM of $326.60. The 32GB version equipped with the code division multiple access (CDMA) air standard carries a BOM of $323.25. The compares with $320 for the first-generation 32GB 3G iPad, based on pricing from April 2010.

You could go on making the comparison on what the Kindle Fire should cost with the missing iPad2 features, but what is consistently missing is accounting for the business models of Amazon vs. Apple.  Amazon is selling its device at below or close to cost.  Apple is making a profit on the devices.  If Apple adds features it thinks about its margin on the device.  If Amazon adds cost to the device, they need to eat the cost or raise the price.  Why would they increase the price/cost unless they see more revenue coming from
The goal of Amazon is to ship a device that it makes money on.  Not necessarily the device itself, but from the goods bought.  Look at the first generation kindle.  It cost $399.  Do you think that was cost?  maybe, but highly unlikely.  What figured out is how much it makes on kindle books.
Apple sells Apps.  Amazon sells Apps.  Both sell videos.  Both sell books.
Does adding a camera, microphone, and 3G help sell more apps, books, and videos?
What amazon has bunches of people thinking about and creating the kindle roadmap is what makes more money for  You know Bezos would be ruthless with this focus and drill into any feature that does not have a clear benefit to
Hope this help you look at the kindle fire in a different way.  writing this down helped me more clearly articulate this view.