© Apple Electronics Production | February 11, 2010

iSuppli: mid-range iPad probably costs $287.15 to make

The mid-range, 3G-wireless version of Apple’s upcoming iPad is expected to carry a combined Bill of Materials (BOM) and manufacturing cost of $287.15, reports market researcher iSuppli.
The mid-range iPad – probably the most profitable for Apple – comes with a 32Gbytes NAND flash memory and 3G wireless capability. The market researcher estimates that it will cost $11.20 to manufacture the device; the rest – $275.95 will be spend on components and other material.

The attached table presents the results of iSuppli’s cost estimate for all six versions of the iPad. Please note these cost estimates account only for hardware and manufacturing costs and do not include other expenses such as software, royalties and licensing fees.

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“At a BOM and manufacturing cost of $287.15, and a retail price of $729, the 32Gbyte/3G version is expected to generate the highest profit of any member of the iPad line on a percentage basis,” said Dr. Jagdish Rebello, senior director and principal analyst for iSuppli.

“The 32Gbyte versions of the iPad cost only $29.50 more to produce than the 16Gbyte versions, but their retail pricing is $100 higher. This shows that Apple believes the highest-volume opportunity for the iPad resides in the mid range of the product line”, he continues.

A closer look on details
The iPad’s display and touch-screen interface is going to be the most expensive segment of the system, accounting for 29% of the BOM of the mid-range 3G model, the market researcher states in a release. As said before, it will employ In-Plane Switching (IPS) technology and iSuppli believes that the iPad display will probably be supplied by three companies – however LG Display and Innolux are the two most likely suppliers.

Additional to that, iSuppli believes that the touch-screen controller chip will be sourced from Texas Instruments. NAND flash memory will likely follow in second place when it comes to expensive components (regardless of the model). In the mid-range 3G model, the 32Gbytes of NAND accounts for 21.4% of the total BOM, the market researcher states. Likely suppliers are Samsung and Toshiba.

Applications processor and DRAM are said to come at a combined cost of $28.90; or 10.5% of the mid-range 3G model’s total BOM. The A4 processor in the iPad will probably cost $17. iSuppli believes the processor integrates an ARM RISC architecture microprocessor and a graphics processing unit. As stated previously, the market researcher believes that it was designed by PA, but the manufacturer will probably be Samsung.

The iPad – although Apple a number of suppliers for its various products uses, iSuppli believes Hynix to be the source – will include a 512Mbytes of DRAM at a cost of $11.90.

The iPad’s wireless subsystem (3G-enabled versions) – comprising the baseband IC, the radio frequency components, the power amplifier, etc. – will probably cost $24.50 (or 8.5% of the BOM of the mid-range version), iSuppli continues. The likeliest supplier will be German chip-manufacturer Infineon.

Source: iSuppli


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