The Amazon Fire Phone went on sale last week to a rather lukewarm response from the public. Mobile experts weren’t easy on Amazon’s new offering either citing the steep pricing and lack of Google Play services as some of the main negatives of the handset. However, a new teardown analysis has revealed that it takes Amazon close to $205 to build the Fire Phone. This is an estimate of the components used in the smartphone’s making and doesn’t take the R&D costs into account. This tells us that the total component cost of Amazon’s smartphone is more than that of the Apple iPhone 5s but less compared to the Samsung Galaxy S5.
Clearly, Amazon isn’t making a lot of profit from the smartphone, at least not by modern standards. The retailer’s primary source of profits is the services that it offers along with the devices. Amazon follows this strategy with the Kindle Fire tablets as well and it has worked well so far. However, we’re not too sure if the same theory can be applied to smartphones given the amount of competition there is today.
The handset is unique in its own way with features like Dynamic Perspective and Firefly, which have been Amazon’s key selling points ever since the device was announced in mid-June.