iSuppli Looks Into Crystal Ball, Estimates iPad Costs
Posted 02/11/2010 at 7:06am | by J.R. Bookwalter
It used to be that you’d have to wait for a product to actually be available before someone could break it down and estimate what it cost to build. One such company looks into its crystal ball to get some cost estimates for the iPad.
iSuppli Corp., famed for buying products from Apple and others only to tear them apart and see what they really cost to produce, has now prognosticated on Apple’s new iPad -- without ever actually touching one. According to AppleInsider, the base model iPad which retails for $499 appears to cost Cupertino only $219.35 to make, based on iSuppli’s analysis.
That breaks down to $80 for the 9.7-inch multitouch display and $17 for the custom-designed A4 processor (believed to be manufactured by Samsung), a mere $2 more than the chip used in the iPhone 3GS. 16GB of memory is estimated at $29.50. Add in $10 for the manufacturing costs and iSuppli arrives at $229.35 per unit.
But the base model appears to actually be the least profitable one for Apple. iSuppli predicts that the 32GB version with the built-in 3G radio will fetch the most profit, with a manufacturing cost of $287.15 and a retail price of $729.
AppleInsider points out that the lower costs indicate that Apple could quickly lower the cost of the iPad should initial sales not pan out as they hope, which has been widely rumored of late. Apple management reportedly told an analyst that the company “will remain nimble” in regards to pricing on the iPad.
The iPad will make its debut in late March in 16GB, 32GB and 64GB Wi-Fi only models, with 3G-bearing models in the same capacity expected a month later for an additional $130 premium.