Analyst: iPad Costs Apple $270.50 to Manufacture

With all the rumors pointing to a nearly-$1,000 price point for the Apple tablet, Steve Jobs surprised onlookers last week when he revealed that the starting price for the iPad would be $499. Of course, in comparison to netbooks, $499 is still very expensive.

Granted, the iPad does come with an LCD display that surpasses the quality of many notebooks, let alone netbooks, but don't be fooled – Apple will still make a tidy sum from the iPad, according to analyst estimates.

According to Computerworld, Brian Marshall of BroadPoint AmTech estimates that the cost of goods inside a 16GB Wi-Fi-only iPad totals to $270.50. This would mean that Apple would make an estimated $208 on every 16GB iPad sold. Of course, the bill of materials does not include the R&D behind the iPad and other value-added services along the supply chain, but it does show that there will be money made at all levels.

Predictably, the most expensive component in the device is the 9.7-inch IPS panel, which costs an estimated $100. The rest of the components are considerably cheaper: 16GB of memory and the aluminum case cost about $25 each, while the Apple A4 chip was listed at $15.

Apple's profit margin on the iPad grows with the larger capacity models, with steeper premiums charged for the 32GB and 64GB models. Interestingly enough, Apple will charge an added $130 for the 3G-enabled versions of its iPad, but analysts guess that the added hardware will only jack up costs by $16.

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    Top Comments
  • Niva
    What I'm honestly surprised by is that they're not charging more. That's the real news here.
  • dsaver
    R&D didnt cost a thing, hmm lets make the iphone bigger, beautiful, blah blah blah
  • AMW1011
    I'll stick with the Archos 9, Viliv S10, Viliv S7, Viliv E70X, or Archos 7 IT if I wanted a UMPC, ultra mobile PC. What I am really interested in is the pocketable market, like the Viliv S5, Viliv N5, Cowon W2, or UMID BZ.

    Every single product I listed is a real PC, can multi-task, and many have true dedicated keyboards.

    So why should someone buy an iPad again?
  • Other Comments
  • brendano257
    Cue flaming of Apple.....

    Congratulations, trolls will always win.
  • pink315
    I believe this a product before its time. I feel its searching for a market, instead of inventing one. Right now its a fail, in a couple years we will all own something like this where we get our digital media fix. Right now though, a product between a laptop and smartphone isn't needed, and if it was wanted, the ipad certainly leaves much to be desired. No 16:9 support, no flash, and wallet burning prices. I'm all for this, but they need to get it right number one, and there has to be a market for it.
  • Niva
    What I'm honestly surprised by is that they're not charging more. That's the real news here.