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The $350 Kindle 2 costs only $185 to build

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The good folks at iSuppli took it upon themselves to rip apart the Amazon Kindle 2. Great, right? What’s not great is knowing how much of a premium you’re paying for the device; ignorance is bliss here. The Kindle 2, for which Amazon wants $359, costs approximately $185 to build. That is, when you take all the Kindle’s parts and add them together, you get a total of $185. So where does the extra $174 come from?

Well, assuming Amazon is in the business of making monkey money (monkey’s funnier, in my defense), some of that “left over” money is profit. Then you’d need to consider all the money Amazon poured into the Kindle 2′s development: designing it, whipping up the software, marketing it, etc. You gotta spend money to make money, Lou.

Inside the Kindle 2 you’ll find memory chips from Samsung; wireless data modules from Novatel Wireless; an ARM controller chip; and the display was developed by eInk, but put together by a Taiwanese company.

This was just like Inside Baseball, but without the silly background music.

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