Apple iPad teardown reveals hardware costs

By Shaun Nichols on Feb 12, 2010 7:19 AM
Filed under Hardware

Mid-range models bring best profits.

Apple's new iPad tablet carries a hardware cost ranging from US$229 to US$346 ($257 to $388), according to a recent analyst estimate.

Research firm iSuppli posted the results of a teardown analysis on the hardware components of the device.

Depending on features and capacity, the iPad costs US$229.35 for the 16GB model without 3G, to US$346.15 for the 3G-equipped 64GB model.

The touch-screen hardware is believed to be the most expensive component at US$80 ($90). Second highest is the "electromechanical and mechanical" components, iSuppli said.

The processor in the device is an ARM A4 chip, the design of which was acquired when Apple purchased chip firm PA Semi in 2008. ISuppli suggested that the chip is manufactured by Samsung.

The iPad's Flash memory is the biggest variable in hardware costs among the different models. ISuppli estimated that the 16GB Flash chips cost US$29.50 ($33), the 32GB US$59 ($66) and the 64GB US$118 ($132).

The 3G and GPS hardware for the 3G-equipped models is believed to cost US$27.10 ($30.42).

Based on the varying hardware and retail costs, iSuppli believes that the mid-range 3G-equipped 32GB models will bring the highest profits for Apple. The lowest profit was found in the basic 16GB model without 3G hardware.

"The 32GB versions of the iPad cost only US$29.50 more to produce than the 16GB versions, but their retail pricing is US$100 higher," said iSuppli principle analyst Dr Jagdish Rebello.

"This shows that Apple believes the highest volume opportunity for the iPad resides in the mid-range of the product line."

 
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