Now that the iPad is available and has been summarily torn down (and even blended!), iSuppli has gone over the component costs and come up with an estimate as to how much the device costs Apple to build.
AppleInsider is reporting that the 16GB Wi-Fi iPad is estimated to cost $259.60 for Apple to build, according to updated figures from iSuppli. Back in February, the company gave an initial estimate which was $40 lower than the one they announced on Wednesday. The updated higher build cost is apparently due to the fact the iPad has more silicon inside than first estimated.
As an example, BusinessWeek notes that the iPad uses three chips for control of the touchscreen. The screen itself is the most expensive component in the entire iPad, ringing up at $95 -- iSuppli estimated it at $80 back in February. The 9.7-inch LCD IPS screens are custom-manufactured by LG, Samsung and Epson, and are estimated to cost twice as much as a typical netbook due to the iPad’s special design.
The memory components cost $29.50 for the 16GB model, $59 for the 32GB model and $118 for the 64GB model, while the custom-built A4 processor is estimated to cost $26.80, a nearly $10 increase from February’s projection of only $17. Finally, the rear case, which is machined from a single billet of aluminum, costs only $10.50.
All in, iSuppli has tallied up the $599 32GB iPad to cost $289.10, with the $699 64GB model racking up costs of $348.10. iSuppli principal analyst Andrew Rassweiler says that 40 percent of the iPad costs mostly go toward powering the touchscreen display and user interface components.
With these hard costs, the iPad should net Apple a pretty healthy profit margin at the end of the day. It also gives Cupertino a lot of leverage in adjusting the sale price of the device, which was an option discussed back in February. However, after Apple announced on Monday that launch day sales were in excess of 300,000, it appears unlikely that price cuts will be coming anytime soon. Sorry, bargain hunters!