iSuppli: 287 dollars to produce an Apple iPad tablet

In what is a common occurrence, the research group iSuppli has dissected the components of the iPad tablet to evaluate its fabrication cost. The verdict: from 229 dollars to 346 dollars, with the tablets retailing for between 499 and 829 dollars.

What is the manufacturing cost of all the iPad tactile tablet components? The estimated answer is between 229 and 346 dollars, depending on the model, according to the research group iSuppli who evaluated the BoM (Bill of Materials).

Knowing that Apple has announced a pricing scale starting at 499 dollars and ranging to 829 dollars, and not taking into account all of the associated costs (intellectual property, transport, marketing), this would nevertheless still be one of Apple’s most profitable products.

The middle of the range release, with 32 GB of hard drive space and an integrated 3G module is the most profitable, with a production cost of 287.15 dollars, while the advertised retail price for this model is 729 dollars.

Analysts have noticed that it only costs $29.50 more to produce this model compared to the 16 GB version, while the retail price difference is 100 dollars, suggesting that this isn’t the model which Apple hopes to push the hardest.


Inside the iPad
The most expensive component is the tactile screen, with all associated elements costing 80 dollars, while the choice of the IPS panel technology provides greater colour depth and a wider viewing angle when compared to traditional LCD screens. The tactile screen controller will be provided by Texas Instruments.

As for the processor, the Apple A4 - one of the big new features brought with the tablet, iSuppli evaluates the manufacturing cost at 17 dollars, estimating that it is built on an ARM RISC microprocessor associated with a graphical processor. PA Semi, purchased by Apple in 2008 is of course behind the processors conception, but the processors ARM applications could be provided by Samsung, with this already being the case for the iPhone and iPod Touch.

iSuppli has information that the 3G modem is provided by Infineon, like with the iPhone, along with the GPS components, while the WiFi, Bluetooth and FM transmitter are either manufactured by Broadcom or Texas Instruments.

It can be noted that with such profit margins, Apple certainly has the capacity to adjust the prices of their tactile tablet range depending on public response, a strategy that was already raised a few days ago. Is it possible that this strategy will be directly integrated into Apple’s pricing scale so as to block competition from positioning against their fixed pricing scale?