Apple iPad Costs $260 to Manufacture – Teardown Analysis

From X-bit Labs: Even though Apple sells its iPad for the starting price of $499, the actual manufacturing cost of the device is around $260, a teardown analysis by iSuppli market research firm has revealed. It appears that Apple makes a vast amount of money both on the device itself as well as content and supporting services that it will eventually sell to the iPad owners.

“While the iPad has the potential to change the game in the computing, wireless and consumer worlds, it already has changed the game of how many electronic products are – and will be – designed,” said Andrew Rassweiler, director and principal analyst and teardown services manager for iSuppli.

Based on its physical teardown, iSuppli estimates the BOM of the low-end 16GB, non-3G iPad at $250.60. When manufacturing expenses are added, the cost rises to $259.60.

The single most expensive component in the iPad is the display, priced at $65 and representing 25.9% of the product’s bill of materials (BOM). The display is a 9.7” diagonal, 262K-color IPS TFT-LCD with a resolution of 1024x768 pixels.

The next most expensive component is the touch screen assembly at a cost of $30, or 12 percent of the BOM. The touch screen assembly is 9.7-inches in the diagonal dimension and uses capacitive technology. The supplier of the assembly is Wintek.

Coming in at third in terms of expense is the NAND-type flash memory, at a cost of $29.50 for the low-end 16GB iPad. The NAND in the iPad dissected by iSuppli was supplied by Samsung Electronics, but Apple likely also is employing other sources of these commodity parts.

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