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Amazon Fire Phone Costs $205 To Build, Teardown Shows

A late entrant in a crowded market tries to stand out.


The components used to assemble the Amazon Fire phone cost a combined $205, a teardown analysis by the research firm IHS shows.

In a report due to be released Tuesday and seen by Re/code, the research firm details the phone’s internal components and their cost. Amazon had no immediate comment.

The Amazon Fire phone’s component cost is higher than that of Apple’s iPhone 5S but below that of Samsung’s Galaxy S5. It sells for $199 with a service contract from AT&T, $650 without a contract.

One unusual feature about the Fire is its Dynamic Perspective feature, which, as Walt Mossberg described in a review last week, allows the user to interact with the phone by tilting his or her head or the phone.

This feature is driven by four sensors, one in each corner, which are used to determine the user’s perspective relative to the device. The sensors were supplied by Omnivision. “It’s the one … unique thing about this phone,” says Andrew Rassweiler, the IHS analyst who supervised the teardown. “Whether or not users find it useful is another question. Other than that, it’s a pretty standard mid-range phone from a hardware perspective.” Amazon has said it hopes software developers will take advantage of the feature with new apps.

Among the companies who supplied Amazon with parts for the Fire phone, the big winner was wireless chipmaker Qualcomm, which supplied the main processor and as many as nine different components. The main processor, a variant of Qualcomm’s Snapdragon, is a popular chip that has been widely used in other phones including the the Galaxy S5, the Nokia Lumia 1520 and the ZTE Grand S II, Rassweiler says.

Long a supplier of both the application processor and several wireless components, Rassweiler says Qualcomm is expanding into chips with different functions, like power management, in order to win more space within smart phones. “There aren’t a lot of frontiers left for these companies to expand into,” he says. “They’re not the sexiest of chips, but they’re worth a few more dollars per unit.”

Amazon apparently chose to save a few dollars on the Fire’s 4.7-inch display, opting for one that displays at 720p instead of full 1080p. The combined cost of the display was about $27, IHS said. The display on the iPhone 5S cost an estimated $43 when it was released last year, while the display on the Galaxy S5 cost about $63, previous IHS reports have shown.

Amazon unveiled the Fire on June 18 after what CEO Jeff Bezos described as a four-year design process. Amazon’s shares initially popped after the announcement, but later fell.

The phone’s other unique feature is Firefly, a visual recognition capability that allows the user to recognize products using the phone’s main camera. Bezos has said it can recognize 100 million different products.

While the component cost implies a healthy gross margin on the phone, Amazon is relatively late to the modern smart-phone game, entering a full seven years after Apple released the first iPhone. Standing out from other players will be difficult, Rassweiler says, which will in turn make a profitable phone a tricky prospect.

“Amazon has sunk a lot of research and development money into this phone,” he says. “The only way Amazon will make that back is by selling a lot of them.”

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