It's hard to tell if they profit even after including fixed costs, but they might.
But pricing it's low end model slightly above it's BOM is a signal to competitors: "we don't care to profit from sales, if you'll compete, you'll lose".
I wonder what Google has planned to fight for the top? Google's Nexus line is their first step into the battle. They're obviously trying to get involved in the media game but they know they're late compared to Amazon and Apple. Surely they will be stepping up their game for the next release.
Google can compete on price though, since they make money from the services they offer, just like Amazon.
Amazon does makes a decent margin above the marginal cost of the $299 kindle fire HD and on the kindle fire HD LTE: http://www.eetimes.com/electronics-blogs/other/4395833/BOM-b...
It's hard to tell if they profit even after including fixed costs, but they might.
But pricing it's low end model slightly above it's BOM is a signal to competitors: "we don't care to profit from sales, if you'll compete, you'll lose".