Apple’s iPad tablet computer costs as little as $259.60 to build, according to analysis by the research firm iSuppli.
Materials for the iPad, which went on sale Apr. 3, include a touchscreen display that costs $95 and a $26.80 processor designed by Apple and manufactured by Samsung Electronics, according to El Segundo [Calif.]-based iSuppli.
Apple announced the iPad, which users can hold in their hands for reading and watching videos, on Jan. 27. ISuppli’s analysis means that the components of the lowest-priced iPad, which includes 16 GB of memory, constitute 52 percent of its $499 retail price, on par with other Apple products including the iPhone 3GS.
A midpriced 32 GB version of the iPad that sells for $599 contains $289.10 worth of materials. A high-end 64 GB version, which retails for $699, contains components that cost $348.10, according to iSuppli.
Much of the iPad’s component costs went toward making the device appealing to use, says iSuppli principal analyst Andrew Rassweiler, who supervised the “teardown” analysis of the product. More than 40 percent of the iPad’s costs are devoted to powering its touchscreen display and other components of the computer’s user interface — “what you see with your eyes and what you feel with your fingers,” he says. The distinctive aluminum casing on the back of the device contributed about $10.50 to the cost of materials.
Apple spokeswoman Natalie Harrison declined to comment on iSuppli’s findings.
More Silicon Chips Than Expected
Research firms conduct so-called teardown analysis of consumer electronics to determine component prices and vendors, and to estimate profit margins. The estimates don’t include costs for intangible items such as software development, advertising, patent licensing, or shipping. In February, iSuppli had estimated that the least expensive iPad would carry a $219.35 cost of materials.
Once it took one apart, iSuppli found more…