The New iPad Costs Apple at Least $316 in Parts per iSuppli

Posted by at 11:04 am on March 19, 2012

While various firms have conducted teardowns of the new iPad, with one company even flying techs out to Australia to be the first to buy and strip the new iPad, the latest one from IHS iSuppli has come up with an estimate on the “bill of materials” (BOM), or just the hardware components of the iPad, at $316. The total represents a roughly 21-25 percent increase in the costs, which has not been reflected in the retail price, reports AllThingsD.

Remarkably, the $316 total from iSuppli is just six dollars higher than a pre-teardown estimate provided by UBM, which estimated that Apple’s “margin” on the retail price versus the BOM to be 51 percent, down from 57 percent in the previous iPad. The new model mostly uses familiar parts and suppliers from the last version, including a Samsung display and made-under-contract processor, Omnivision camera, Qualcomm 3G (and now LTE) radios and more.

Apple may feel comfortable with rising materials costs due to some lowering of parts costs in other areas, a reduced manufacture cost on the still-available iPad 2 and possibly future discounts to come when other display providers such as LG Display and Sharp can be brought on board. The teardown done by iSuppli suggests that the biggest price increase came from the display, which they believe rose from $57 on the iPad 2 to $87 on the new model. Components that have remained the same in both the iPad 2 and new version are thought to have declined in price over the last year.

The company says the 16GB Wi-Fi only iPad’s BOM represents about 63 percent of the retail price, while the 3G/LTE 64GB model costs about $409 to make, or roughly 49 percent of the retail price. The A5X chip, with its improved graphics subset, is also estimated to have risen sharply in cost, from $14 to $23.

The battery in the new iPad, with 70 percent more capacity to keep the real-world life at least as high as the previous model despite the increased power requirements, is said to cost Apple $32, up from $25 in the previous model. The battery’s improved lithium-polymer technology has helped keep the cost low compared to the increases in other part costs.

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