More iPad Cost Estimates Show Room for Price Cut

iSuppli, the firm that loves to do teardowns of new gadgets to find out just how much they cost to put together, last week revealed its estimates for the Apple iPad.

The firm found that the lowest-end iPad will cost Apple $219.35 in total materials and $10 in manufacturing costs, equalling a $229.35 total for the 16GB Wi-Fi-only model. While Apple is expected to be getting more than double that back from the $499 price tag, the most profitable model is the mid-priced 32 GB iPad with 3G wireless capability, which will contain $275.95 worth of components and other materials and cost $11.20 to manufacture, iSuppli estimates. This will retail for $729 in stores.

Keep in mind that these are present-day estimates without exposure to actual hardware, but it certainly shows that there's a comfortable buffer (even after R&D and other overhead costs) for Apple to drop price.

In fact, the Wall Street Journal noted that Apple expressed intentions that it plans to remain "nimble" on iPad pricing (read: price drops if the competition heats up or there is lesser-than-expected demand).

Marcus Yam
Marcus Yam served as Tom's Hardware News Director during 2008-2014. He entered tech media in the late 90s and fondly remembers the days when an overclocked Celeron 300A and Voodoo2 SLI comprised a gaming rig with the ultimate street cred.
  • duckmanx88
    i would say that the cost of R&D always makes it expensive for early adopters but there just wasn't any R&D into the iPad. its just an giant expensive ipod touch
  • Bert R
    "While Apple is expected to be getting more than double that back from the $499 price tag, the most profitable"

    ... yes? Go on?
  • El_Capitan
    They should be moving the price up over $1000, I'm sure people that want it would actually pay that much.
  • arlandi
    Apple to drop the price for its new and much hyped product? very unlikely. but i'd let them have the chance to proof me wrong...
  • zoemayne
    I would get it for its e-reader feature if it truly can be read like an e-ink screen otherwise no.
  • tipoo
    If the internal Apple memo is anything to go by, avoid buying it until they do cut the price, or go by the "wait for the second gen" rule. Or just get a cheaper netbook that does so much more, just sayin.
  • Johny-O
    waiting for full 1080 and larger ssds before i would by one myself and ps not running apple sofware
  • dman3k
    Surprise surprise... Apple making more money on a crappy product that only idiots will buy...
  • JohnnyLucky
    I'm sure Apple had pricing changes all worked out in advance. Take what the market can bear. Adjust if necessary and still make a profit.
  • wintermint
    Sure if people actually buy it :)