iSuppli, which makes a business out of tearing down electronics products to see what's inside and then publishing their cost findings, released a report stating that Amazon's Kindle 2 costs $185.49 in components. The Kindle 2 retails for $359. That's a difference of $173.51.
Engadget shows the component breakdown:
I don't mind Amazon making a profit, but I'm still not sold enough on the Kindle to fork over $359 for it. James Martin of PC World did a cost-justification analysis comparing the purchase of a Kindle 2 and associated e-books vs. going the traditional route and it didn't work out so well:
"...my number crunching reveals that even a loyal reader of paperbacks would only have saved $58.82 by the end of the second year of Kindle 2 ownership."
That's a whopping savings of $60 after two years. In his analysis, he assumes 2 paperbacks per month; that's a lot of reading. I know I couldn't maintain that pace for 2 years.
He goes on to say:
"Amazon is sure to introduce a third-generation Kindle during that period, which you may decide you can't live without. There goes your $58.82 savings, and then some."
Therein lies the crux of technology, my friends. There's always something bigger and better right around the corner. However, I'd love to own a Kindle 2, and maybe that "next gen" version will help drive down the price of the current model.
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