Amazon.com new Kindle Fire tablet costs $209.63, IHS iSuppli estimated on Friday but since Amazon is selling the tablet for only $199 every tablet is costing the company $10 to produce.

The lower-than expected price for the Kindle Fire only underscores how cutthroat the tablet market is with Amazon daring to take chances with a lower-price tab to get as many customers as possible. Other tablet manufacturers are already vying for market share in the tablet world dominated by Apple's iPad.

HIS iSuppli estimated the total cost of the Kindle Fire at $209.63 with components costing $191.65 and additional manufacturing costs at $17.98.

An Amazon spokesman did not comment on IHS's estimates on Friday afternoon.

Ever since Amazon CEO Jeff Bezos unveiled the Kindle Fire on Wednesday, analysts have been speculating on how much the tablet is costing the e-commerce business. An analyst at Piper Jaffray estimated earlier this week that Amazon would actually lose about $50 on each Kindle Fire tablet.

Amazon is betting on the device driving more sales to its products and services to offset the initial losses on the Kindle Fire. This marketing strategy was used by Procter and Gamble in selling its Gillette razors at a loss and makes up for the difference by selling more razor blades later, Wayne Lam an analyst at IHS iSuppli explained.

"When further costs outside of materials and manufacturing are added in -- and the $199 price of the tablet is factored along with the expected sales of digital content per device -- Amazon is likely to generate a marginal profit of $10 on each Kindle Fire sold," the research firm added.

Other analysts are saying that Amazon's best chance at recouping its losses is by capitalizing on users who download apps. Amazon has never dominated in digital music and videos and Kindle Fire users are not likely to buy a lot of Amazon's digital music and video offerings.