Making of Amazon Kindle

By
Aashik Francis (01)
Aayush Maira (02)
Deepak Jose (43)
Gautam Krishnan(53)

HISTORY
Founded in 1994 by
Jeff Bezos

Launched in 1995

Online bookstore and

more...

First major
companies to do ecommerce

Seattle HQ because...
Large high-tech work force

Proximity to a large book distribution center

Over the years acquired many companies

1997, IPO announced

Fund used to:
Broaden the company
Improve

the product

Distribution

capabilities

Paper like
display quality

Books,
Newspapers,
Magazine

Adjustable font

Huge battery
life

The Case
Where to make it?
Must have the magic combination of

>Low Price >High functionality >High reliability >Design

elegance
Competitors Barnes & Noble NOOK , Sonys e-readers
Goal: To reduce price aggressively ; make kindle so affordable

that two kindles can be seen as a digital library in the house.

The Case Designed California ( R&D located)

Ink ( the crucial microcapsule bead used for display )
was made my E INK based in Cambridge.
Most of the other components were manufactured in
Asia

iSupplis Research
Manufacturing cost of Kindle 2 - $185
Most expensive component Bistable Electrophoretic DISPLAY $60

(outsourced to Taiwanese PRIME VIEW)

Wireless card- $40 (involves a $13 Qualcomm designed chip but mnfgd in

Novatel wireless- South Korea)

$8.64 Microprocessor is designed by Texas based Freescale Semiconductors

but outsourced to Taiwan & China for manufacturing.

Lithium Polymer Battery $7.50 mfg in China.
Freescale,Qualcomm and E INK account to only $40-50 of the total cost.

COSTING

Countries with lowest

Manufacturing Costs
Indonesia
India
Mexico
Thailand
China
Taiwan
US

Reasons for decline of

Competitiveness of previous
Cheaper havens

Sharp wage increases 12 %

Lagging productivity growth
Unfavourable currency swings 25%
Dramatic increases in energy costs
Cost of shipping the goods

Reasons for revival of American

Competitiveness
Stable wage growth
Sustained productivity gains
Steady exchange rates
The big energy advantage

CONCLUSION
Many companies continue to make manufacturing
investment decisions based on conditions a decade or
more ago
For every dollar required to manufacture in the U.S., it
now costs 96 to manufacture in China
The new data show theres a competitive marketplace
of manufacturing opportunities today
Relative cost structures are changing and these
changes are likely to continue in the future

REFERENCES
http://www.bloomberg.com/bw/articles/2014-04-25/china-v
s-dot-the-u-dot-s-dot-its-just-as-cheap-to-make-goods-i
n-the-u-dot-s-dot-a
http://www.cnbc.com/id/100651692#.
http://
www.bcg.com/media/pressreleasedetails.aspx?id=tcm:
12-159505
THE EVERYTHING STORE Brad Stone