I'm not surprised by the narrow cost margins, but it does raise an interesting issue. If the K4 costs this much, then the Nook Touch has to cost more, right?
That would mean that B&N are in an even less comfortable position than Amazon; they're probably literally losing money on each $99 Nook Touch. Unfortunately for B&N, they're stuck; they can't not play price chicken with Amazon. And what's even worse is that they're playing chicken with a company that is willing to lose money on a product forever.
At this point I have to wonder if B&N and Amazon are each hoping that the other sells the most ereaders; that way the other will suffer a greater financial loss.
Yes, I know that we've seen research data that shows ereader owners buy the most ebooks, but do they really buy enough?
Direct Material Cost
- Display Module: $30.50
- Main PCB: $30.37
- Other - Enclosures / Final Assembly: $15.08
- Box Contents: $2.06
- Misc Interface PCBs: $0.59
Direct Material Cost Total: $78.59
- Manufacturing Cost: $5.66