iSuppli Pegs iPad Component Cost at Nearly $260
Two weeks after Steve Jobs’ introduction of the iPad at a special media event, research firm iSuppli tallied the unit’s estimated component costs for a 16 GB Wi-FI iPad to be about $219, as opposed to its retail price of $499. Per Bloomberg BusinessWeek, the firm’s estimates offered some indication of a healthy profit margin for Apple on the device, although excluding numerous other expenses such as research and development, marketing, and licensing from the study.
Now that the iPad has been released in the United States and iSuppli has been able to actually tear the device apart, the cost has been upped to generate a revised estimate of nearly $260 for the entry-level model’s component costs. The $40 increase over earlier estimates is due to several factors, including the use of more chips than originally thought.
Once it took one apart, iSuppli found more silicon chips than it had expected powering interactions with the iPad’s 9.7-inch screen. Apple uses three chips to control the iPad’s touchscreen, for example. “Because of the sheer scale of this device, we’re seeing more here than we expected to,” says Rassweiler.
The most significant single price bump, however, appears to be the iPad’s touchscreen, which checks in as a $95 part and up $15 from the company’s earlier estimates.