For those who haven't heard of it before, or are still working on believing what Amazon is trying to do (and has seemingly, thus far at least, succeeded in doing), Amazon has reiterated the reason its tablets are so cheap.
The Kindle Fire HD 4G LTE (set for November 2012 availability) is the only tablet in Amazon's lineup that actually bears the so-called standard price of slates: $499 / 499 Euro.
The other Kindle Fire slates, with prices as low as $159 / 159 Euro, are so cheap not due to some manufacturing secret, but because Amazon hasn't added anything to the price on top of the manufacturing and part costs.
According to Jeff Bezos, the founder and chief executive officer of Amazon, the company charges about as much as it pays to have each device made, and that goes for its e-readers as well.
With this to ensure that its gadgets spread far and wide, Amazon can focus on selling other products to its customers.
Kindle is a relatively closed ecosystem, and the tablets and e-readers are direct means for owners to be exposed to Amazon's extensive products and services range.
For that matter, the Kindle Fire HD even has a special advertising screen that kicks in when the device has been left idle for too long (the lock screen as it were). The feature can be removed, but at a cost.
This is at the same time different and similar to Apple and how it sells its iPad and iPhone devices. Apple definitely charges more than the manufacturing costs, and while it doesn't sell many physical objects, its App store is farther along than most, if not all, others, so it doesn't even have to put much effort into persuading owners to use it.
On that note, this explains, to an extent, why Windows 8 devices are so incredibly pricey. Their makers don't have App stores and, in the case of those who use Intel CPUs (most of them), there is nothing like AMD's AppZone to fall back on either. And when Microsoft finally makes its app store a viable endeavor, OEMs won't really benefit from it.
Amazon: We Make No Money Off Kindle Fire Tablets and E-Readers
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