Apple iPad Costing $259.60 To Build

Market research firm iSuppli carried out one of its famed teardown parts analysis of the cheapest Apple iPad and guesstimated the total price of its parts to be as low as $259.60.

Not surprisingly, the most expensive item on the list happens to be the 9.7-inch capacitive touchscreen which iSuppli says might have cost $95 or roughly 38 percent of the total manufacturing price.

The other crucial part happens to be the $26.80 A4 processor built by Samsung but designed by Apple itself. The other parts that have been listed include 16GB memory worth $30 and the battery which costs roughly $21.

Interestingly, Apple said that it would charge $107 to service the non-replaceable battery, cost that includes a "new" iPad and shipping charges. Overall, the prices are much higher than what the research firm published in February when it reckoned that the cost of the iPad parts should not be more than $230.

iSuppli said in its report that "Cost for the display, the battery, the user interface chips and the power management Integrated Circuits all exceeded iSuppli’s initial estimates, driving up the total Bill of Materials".

We were the first to carry out a virtual teardown analysis of the iPad earlier this year and found out that the cost would not exceed $400. We significantly overestimated the price of the touchscreen module it did not cost $254 as we were expecting.

Our Comments

The teardown analysis was carried out for the cheapest iPad which cost $499. Even then the profit margins are extraordinarily high compared to the single digit margins many other manufacturers enjoy.

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