Research firm: Amazon tablet costs $201.70 to make

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NEW YORK (AP) -- Research firm IHS say Amazon.com Inc.'s Kindle Fire tablet, which started shipping this week, costs $201.70 to make, $2.70 more than Amazon charges for it.

The analysis indicates that Amazon is, at least initially, selling the tablet at a loss that it hopes to cover through sales of books and movies for the device. The manufacturing cost of a new gadget usually comes down over time as chips decline in price.

Amazon CEO Jeff Bezos told The Associated Press in September that company's goal was to make a small profit from the hardware, but as a retail company, Amazon was willing to make a smaller profit than most electronics companies would.