How Much Does That New iPad REALLY Cost To Make?
Fortunately for all of us, that burning question has a relatively reliable answer. A company named iSuppli broke the costs down and determined that the components for each of the released models of iPad come in at the following totals for parts:
iPad 16GB version – $259.60 ($236.40 profit for Apple)
iPad 32GB version – $289.10 ($309.90 profit for Apple)
iPad 64GB version – $348.10 ($350.90 profit for Apple)
Roughly a 50% margin, give or take. I don’t believe that includes assembly or getting the devices to the States, as well as other charges involved with product marketing, store shipments, etc. Still not bad given that prices on hardware will continue to decline over the life of the product giving Apple even more margin over time.
Interestingly enough, more than 40% of the iPad’s costs are consumed with components powering the touchscreen display and user interface of the device. Here’s what I gathered for individual component costs for those interested:
Touchscreen Display – $95.00
Processor/Main Chip – $26.80
Flash Memory Chips – $29.50 (16GB); $59.00 (32GB); $118 (64GB)
Broadcom Chip for Bluetooth & Wi-Fi – $8.05
Texas Instruments Chip to help control touchscreen – $1.80
2 Additional Chips used to control touchscreen – $3.70
Ciruss Logic Audio Chip – $1.20
Aluminum Casing on Device Back – $10.50
For as expensive as everyone complains Apple hardware has always been, a 50% gross margin doesn’t seem out of line by any stretch. They make great devices that I’ve always felt last longer than their counterparts.