Amazon.com started selling its cheaply priced tablet, Kindle Fire, this week for $199. That is pretty cheap compared to the $500+ price tag for Apple's iPad and $400+ for most of the Google's Android Tablets. Amazon's Kindle fire runs on modified version of Android's operating system.
According to a report by IHS the cost to manufacture Kindle Fire is $210.70 which would indicate that Amazon is currently selling the Kindle Fire for a loss of $2.70 per device. Amazon CEO Jeff Bezos told The Associated Press in September "Amazon was willing to live with a smaller margin than most electronics companies would."
Amazon's main goal seems to be making profit by selling other services offered by Amazon, like Amazon MP3, Amazon App Store, Amazon Books, etc. Even though Kindle Fire runs on Android OS it looks no where close to a typical Android Phone or a Android Tablet. Amazon's Kindle Fire OS has been highly modified to focus more on services and products offered by Amazon compared to a typical Android which would focus more on integration with Google Products and Services.
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