Oh may be you are right, but this will not be the strategy of a multinational company to earn profits, all the other giants are also having the same pricing strategies. This is because we are comparing it with Xiaomi it look too much price difference. But if you compare it with any other product from the electronic giants then the price difference is not that huge as such.
I think that Amazon may be providing the library of Kindle supported books free along with this tablet. Need to check that, that may be the only reason of high cost. Besides the better software facilities.
Also, don't forget the additional costs in manufacturing. Yield and startup costs can be high at the beginning. It is good to see that Amazon will have a profit from selling this hardware, unlike the tablets. They do need some profit for the bottom line.
>> However, what i do not understand in most of the teardowns is the hidden cost estimates that are not considered so that the owner know the true value of the device.
This is a guidance, I will say. If Amazon places an order for 10 million chips, the price will be different when it is buying say only 1 million units. The expert is providing a guidance and we thank them for that. It cannot be hard science until you know the quantity and discount from the firm.
>> I am sure Amazon is going after the recurring revenue coming from video and product selling from Fire instead of from selling the phone.
That is the business model. The question is why they have to make the hardware expensive to execute that. In the past, they subsidize the hardware to enable the evolution of the monetization of the contents.