| SAN FRANCISCO, July 23
SAN FRANCISCO, July 23 The cost to make
Amazon.com Inc's Kindle Fire has fallen since the
tablet was launched last year, giving the company room to cut
the price aggressively, according to analysts.
The parts that go into the Kindle Fire cost $133.80,
according to a recent estimate by IHS iSuppli, which tracks
technology supply chains. That is down about 28 percent from
November 2011, when IHS estimated the components cost $185.60.
Most of the decline has been driven by falling prices for
memory chips, displays and touch screens, according to IHS.
"Memory prices have been in free fall - with roughly a 50
percent price reduction in the past year," said Brad Gastwirth
of independent research firm ABR Investment Strategy. "On the
display side prices have also come down."
Amazon is expected to launch a new version of the Kindle
Fire later this year and some analysts think the company will
cut the price.
"They will be able to keep it fairly competitive because
memory prices have come down dramatically," Gastwirth said.
When Amazon launched the Fire last year, it priced the
device at $199, which was lower-than-expected at the time.
"Amazon will be very aggressive here," said Robert Brunner,
founder of Ammunition, which has helped Barnes & Noble
design its Nook devices. "If they can drop the component costs,
they will cut the retail price aggressively."