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$259.60: Cost of Components to an iPad 16GB

By - Source: Tom's Hardware US | B 46 comments

How much do the materials inside an iPad cost? Around 52 percent the retail cost.

The iPad in its Wi-Fi-only form for between $499 for the low-end 16GB to $699 for the 64GB model – but how much does it cost in parts? Now that component analysis firm has its hands on a shipping model, it estimates that the base model that costs $499 in stores is made of around $259.60 in parts, according to BusinessWeek.

For the 32 GB version that sells for $599, iSuppli says it contains $289.10 in materials. The 64GB version at $699 cost $348.10 in parts.

The biggest part to the iPad is its 9.7-inch IPS LCD display, which costs around $95. The A4 custom-packaged CPU/GPU/RAM chip costs an estimated $26.80.

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  • 24 Hide
    volks1470 , April 8, 2010 1:42 AM
    Holy freaking profit batman!
  • 10 Hide
    Anonymous , April 8, 2010 2:24 AM
    You forgot to mention the amount apple pays to it's child labor overseas. Oh wait I see it now. It's in .000001 font. Tricky.
Other Comments
  • 24 Hide
    volks1470 , April 8, 2010 1:42 AM
    Holy freaking profit batman!
  • 10 Hide
    Anonymous , April 8, 2010 2:24 AM
    You forgot to mention the amount apple pays to it's child labor overseas. Oh wait I see it now. It's in .000001 font. Tricky.
  • 1 Hide
    Yrahcaz91 , April 8, 2010 2:28 AM
    And they sold how many hundred thousand of these puppies? This is a fine example of capitalism. Good for Apple.
  • 3 Hide
    dimar , April 8, 2010 2:30 AM
    I was thinking of getting the basic model to read comics. But now that I've seen this, I won't be getting it until the price goes to at least $359.60
  • 7 Hide
    MrHectorEric , April 8, 2010 2:32 AM
    Normally I would say that the software development and testing would make up more of the cost, but in this case Apple basically ported everything over from the iPod touch and iPhone so my usual statement doesn't apply. There's probably a price drop built into the price like the iPhone. In my mind, the basic iPad should be $350-$400 tops considering the lack of features and what little effort apparently went into development.
  • 7 Hide
    jamoise , April 8, 2010 2:36 AM
    not surprising actually, I'm not a fan of apple myself but it seems people don't consider all the costs involved in the overall product and only ever looks at the base cost of hardware, things like.. warranty, customer support, the cost of the software that runs the hardware (the costs involved in updating and supporting the software), nevermind the costs in actually setting up manufacturing facilities and prefab costs for all the items in it that are not a standard component. (im sure the mainboard inside it is not an "off the shelf item") obviously once they start recouping some of the costs of the initial outlay, the price will come down, as what usually happens to all things.
  • 0 Hide
    knowom , April 8, 2010 2:56 AM
    Funny that the only thing good about it costs the most.
  • 2 Hide
    Trueno07 , April 8, 2010 2:56 AM
    "The A4 custom-packaged CPU/GPU/RAM chip costs an estimated $26.80."


  • 2 Hide
    dannyaa , April 8, 2010 2:57 AM
    I just knew there'd be a bunch of young.... errr... what's the nice world.... less sharp.... people commenting on insane markups, capitalism, greed, etc.

    You do realize a company spends years working on a product and paying engineers and developers 6 figure salaries? Paying rent for their offices, retail stores? Paying salaries to staff retail store employees? Shipment fees? Marketing and advertising?

    Certainly they will make a profit... then again that's kind of the point, isn't it? Would you go to your job if you didn't make a profit?
  • -2 Hide
    MrComputerTecho , April 8, 2010 3:06 AM
    Do you KNOW Apple...look at tere MacBook Pro..(its still at 3200) ...THERE NOT GOING TO GO DOWN...WANT TO KNOW WHY>>>>>>.....Apple has a sort of monopoly on the OSX OS. Not Allowing Anyone To Use It Unless Its APPLE. there For they can put the price at 500000000 and people....well eventually buy it know>
  • 0 Hide
    mianmian , April 8, 2010 3:07 AM
    Let's do a comparison,
    Intel 2009 Q4, gross margin percentage is 65%, which means only 35% of the sale price is production cost.
  • 2 Hide
    mrhappy50 , April 8, 2010 3:40 AM
    it probably costs less than that considering the part prices listed are "retail" in a sense. ALSO apple buys HUGE quantities of parts thus lowering the price further.
  • -2 Hide
    kingnoobe , April 8, 2010 4:22 AM
    LOL do people do realize this very much a normal markup. Quit acting like apple is evil, because in this case their no different then any other company.

    Before you cry fanboi I own literally nothing of apple, and would never buy a mac, iphone or i anything for that matter lol.
  • -3 Hide
    brianmoz , April 8, 2010 4:33 AM
    yep im with danyaa
    the whole hating apple for being a company is pathetic guys. Lets take a step back. Apple makes money selling things people want, employ thousands, make products for people who are not tech savvy. Jobs isnt just hording money for himself he is reinvesting it and pushing things forward. Im not saying apple is a godsend but lets not beat up on an imagined demon here.
  • -7 Hide
    miloo , April 8, 2010 4:35 AM
    APPLE rulez ~ LOL "499" good price !
  • 3 Hide
    Nintendork , April 8, 2010 4:37 AM
    That's a good thing. The other thing is boycott any apple product. Any person who cares for the health of the "sheep" should do that.
  • 7 Hide
    nottheking , April 8, 2010 5:02 AM
    I'm actually gonna say that the estimate was way too high. Especially given the margins of difference given between the different flash sizes. They suggest that the difference between 16GB and 32GB is $29.50US, and twice that, $59.00US, to go from 32 to 64. In other words, they're suggesting the chips are costing Apple ~$1.85US per gigabyte. ($118US for 64GB) That's the price you'd typically pay (or perhaps a little less) for a full flash product with controller, packaging, interface, etc; you'd be looking at the range of $130-150US or so for a 64GB flash drive or SSD.

    Obviously, Apple isn't even buying SSDs; they're buying the flash chips and packaging them onto the motherboard themselves. And they're not buying them individually, with packaging and all; they're buying them in trays, packed into pallettes, like other OEMS do; they do it by the thousand. So a more reasonable estimate is that they'd be paying closer to $50US for 64GB, or less.

    However, I can see the cost of the touchscreen. (it's ALWAYS been the most expensive part of portable electronics) Similarly, their estimate for the A4 sounds about right for an embedded logic chip of that size. I'd estimate that Apple spends maybe $60-100US for the circuit board and its contents, (depending on flash size) $20US for the battery, $10US for the other internal parts, (like the antennae) $95US for the screen, and $15US for the frame/casing.

    So all told, I'd estimate perhaps $190US for the 16GB version, $205US for the 32GB version, and $230US for the 64GB version. 3G support would likely add in another $10-20US or so in hardware costs. So, for the non-3G versions, you're looking at respective cost ratios of 38.0%, 34.2%, and 32.9% respectively.

    kingnoobeLOL do people do realize this very much a normal markup. Quit acting like apple is evil, because in this case their no different then any other company.

    Actually, that markup's a bit high for a high-profile piece of consumer electronics. ESPECIALLY upon launch, as those costs do not take into account economies of scale and miniaturization, both of which ensure the production cost will CONSTANTLY drop for Apple as they make and sell more.

    Microsoft applied this with their Xbox 360; when it launched, they LOST MONEY on what they sold. Though with later cost reductions due to scale and miniaturization, the costs came down under the price they sold 'em at. Sony's done the same thing with the PS3. (actually, I still dunno if they're making a profit on the hardware itself)

    And no, this applies to Apple as well; not only do they sell the hardware, but they ALSO make a killing in their cuts in downloaded aps, as well as the fact that they intend to charge for OS upgrades for this thing.

    It's the simple matter of fact: Apple has higher markup than their competition. It shows when you compare their products to their competitors'; comparable ones are much cheaper (like Freescale's proposed tablet) and comparable-priced ones offer superior capabilities. (like Slate or CrunchPad) This applies to their other products, too; iPods ALWAYS cost more than otherwise-equal music players by other people.
  • -1 Hide
    zoemayne , April 8, 2010 5:03 AM
    HollowtekYou forgot to mention the amount apple pays to it's child labor overseas. Oh wait I see it now. It's in .000001 font. Tricky.

    its not that significant. they only pay them .0024 yen.
  • 5 Hide
    r0x0r , April 8, 2010 5:08 AM
    otacon72If you really think about Apple's business model it's so fundementally flawed.

    Which is why they've been one of the most profitable businesses over the past 10 years.

    I dislike Apple as much as the next guy but to say that their business is flawed after looking at their profits (and their customer retention rate) would be obtuse.
  • 3 Hide
    sliem , April 8, 2010 5:35 AM
    Why did this surprise so many?
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