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  • iPad 2 Costs About $323 to Manufacture


    The iPad2 has received another tear down, this time by market research firm IHS iSuppli. This teardown is an estimate of the total cost of materials that Apple uses to manufacture the latest iPad 2. These figures help investors and analysts predict Apple’s future profitability over the next few quarters.

    IHS iSuppli estimates the total cost of materials for the Verizon 3G version of the iPad 2 with 32 GB to be $323.35. The same iPad 2 model on AT&T's network has a slightly higher cost estimate of $326.60. The difference in price is minimal at only $3.25 and most likely has to do with the fact that both versions use slightly different wireless components. For example, the AT&T version includes an extra GPS chip along with the Bluetooth and Wi-Fi chips that add an extra $1.50 to the price of each unit.

    The iPad 2 that iSuppli disassembled included an LCD panel made by LG. This LCD display is by far the highest price component coming in at $127. Apple does use LCD panels from other manufacturers, but the price difference is most likely very minimal. Apple's latest A5 chip is still being manufactured by Samsung and costs around $14 each. The memory on the 32 GB iPad 2 is said to cost $65.70 for both flash and DRAM memory chips combined.

    The total cost estimates for the iPad 2 is an important figure for investors because it helps them estimate Apple’s future profitability. These estimates, however, do not take into account other costs that Apple incurs during product development. The cost of an iPad 2 also includes such things as software development, packaging, shipping, distribution, and manufacturing. Additional costs such as these are not taken into account with the latest iPad 2 tear down estimates.

    Source: AllThingsD
    This article was originally published in forum thread: iPad 2 Costs About $323 to Manufacture started by Wiley John Wright View original post
    Comments 31 Comments
    1. delusion950's Avatar
      delusion950 -
      they sure do make nice profit. double and triple.
    1. Beej2211's Avatar
      Beej2211 -
      They make a hefty profit in the UK. What costs $499 in the US, costs £499 in the UK. That exchanges to $805

      So yeah, Apple recover their costs
    1. Tizocman's Avatar
      Tizocman -
      Quote Originally Posted by Beej2211 View Post
      They make a hefty profit in the UK. What costs $499 in the US, costs £499 in the UK. That exchanges to $805

      So yeah, Apple recover their costs
      the also have to pay to export and taxes and other fees
    1. JollyRogger's Avatar
      JollyRogger -
      But it still does no explain how they can justify the difference in price from the 16Gb to the 32Gb to the 64Gb versions. The higher up the range you go the bigger the profit for Apple. The price for Ram is not that much.
      I'm still gonna get me a Wifi 16Gb version though.

      Jolly
    1. tudtran's Avatar
      tudtran -
      Quote Originally Posted by Beej2211 View Post
      They make a hefty profit in the UK. What costs $499 in the US, costs £499 in the UK. That exchanges to $805

      So yeah, Apple recover their costs

      Costs £329 in the UK not £49. That is about $529. Still $30 more
    1. snuckols's Avatar
      snuckols -
      What none of you seem to realize is that Apple has spent a TON of time developing and marketing the device. Anyone with any business sense knows that your cost go well beyond the cost of the parts involved in making a device. Apple is also publicly traded stock and if they made the kind of profit that you all speak of, there would be alot more people investing in it! Pull your heads out of your a$$es people and get a job!
    1. ventodivino's Avatar
      ventodivino -
      so the headline should read "the hardware in an ipad2 is worth 350$ all together"
    1. OleBayCrab's Avatar
      OleBayCrab -
      If anyone is arguing the price of the iPad 2, doesn't completely understand business. Apple has employees, taxes and cost you can't understand to pay. There's a reason why their employees don't complain about wages and work environment. The operate in the US. JOBS for Americans! Businesses are in business for profit no other reason. Apple does a great job at selling the emotion of a product, it doesn't mean they don't want to please their stockholders.
    1. aqan's Avatar
      aqan -
      Quote Originally Posted by Beej2211 View Post
      They make a hefty profit in the UK. What costs $499 in the US, costs £499 in the UK. That exchanges to $805

      So yeah, Apple recover their costs
      You can blame some of that on VAT and rest on import duty.

      Apple can only charge you what you are willing to pay. Unfortunately (for consumers) apple products demand a high price for a long time and apple keep coming up with new version before the old product looses demand.
    1. Silverado1987's Avatar
      Silverado1987 -
      Edit. Nevermind
    1. hottnikkz's Avatar
      hottnikkz -
      Quote Originally Posted by snuckols View Post
      What none of you seem to realize is that Apple has spent a TON of time developing and marketing the device. Anyone with any business sense knows that your cost go well beyond the cost of the parts involved in making a device. Apple is also publicly traded stock and if they made the kind of profit that you all speak of, there would be alot more people investing in it! Pull your heads out of your a$$es people and get a job!
      Exactly, came here to post this. Thank you. They aren't just putting the pieces together. They are paying for all the work put into figuring out how to put all the pieces together, etc. etc.
    1. Sem656's Avatar
      Sem656 -
      Everyone realizes that and they advertise and crap. That's not what the post is about. It's what the hardware costs.

      That is the price for all that stuff but would apple get a better deal buying in bulk? Or is that taken into cobsideration I wonder?
    1. Willsey's Avatar
      Willsey -
      Quote Originally Posted by OleBayCrab View Post
      If anyone is arguing the price of the iPad 2, doesn't completely understand business. Apple has employees, taxes and cost you can't understand to pay. There's a reason why their employees don't complain about wages and work environment. The operate in the US. JOBS for Americans! Businesses are in business for profit no other reason. Apple does a great job at selling the emotion of a product, it doesn't mean they don't want to please their stockholders.
      Well said.. You can't run a muliti billion pound company and keep on producing new products without a hefty profit..
    1. dale2's Avatar
      dale2 -
      Quote Originally Posted by Sem656 View Post
      Everyone realizes that and they advertise and crap. That's not what the post is about. It's what the hardware costs.

      That is the price for all that stuff but would apple get a better deal buying in bulk? Or is that taken into cobsideration I wonder?
      at $14 for a processor i think its safe to assume they are already buying in bulk
    1. whereswaldo's Avatar
      whereswaldo -
      It might seem like they're earning a lot of money off of it, but don't forget they also have to pay workers and to have it shipped from china
    1. whereswaldo's Avatar
      whereswaldo -
      Quote Originally Posted by tudtran View Post
      Costs £329 in the UK not £49. That is about $529. Still $30 more
      They sell at $549 in Canada, but the Canadian dollar is worth more than the American. So they should sell it at equal or less
    1. bigboyz's Avatar
      bigboyz -
      Apple is a business...a business is in business to make $$. Makes me laugh as no other tablet is soo scutinized..haha! No one cares how much the Xoom costs to make, no one cares how much the Galaxy Tabs cost to make..haha! Guess they only want specifics on the BEST...it is what it is :]
    1. Sem656's Avatar
      Sem656 -
      Quote Originally Posted by bigboyz View Post
      Apple is a business...a business is in business to make $$. Makes me laugh as no other tablet is soo scutinized..haha! No one cares how much the Xoom costs to make, no one cares how much the Galaxy Tabs cost to make..haha! Guess they only want specifics on the BEST...it is what it is :]
      Well as far as hardware goes the xoom is actuall superior. It's mainly the iOS that makes iPad 2 better.

      And apples great taste in design
    1. thetoothfairy's Avatar
      thetoothfairy -
      Quote Originally Posted by snuckols View Post
      What none of you seem to realize is that Apple has spent a TON of time developing and marketing the device. Anyone with any business sense knows that your cost go well beyond the cost of the parts involved in making a device. Apple is also publicly traded stock and if they made the kind of profit that you all speak of, there would be alot more people investing in it! Pull your heads out of your a$$es people and get a job!
      Would invest in Apple, however according to the app on the phone Apple is $352.50.. how many people can afford to invest in Apple at this price?

      However I could kick myself because a couple of years ago I could have bought in at $89.00 a share..
    1. qgshadow's Avatar
      qgshadow -
      Quote Originally Posted by whereswaldo View Post
      They sell at $549 in Canada, but the Canadian dollar is worth more than the American. So they should sell it at equal or less
      Yes it sucks. 50$ more