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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. CynicalDriver's Avatar
      CynicalDriver -
      As of 10 seconds ago: the Canadian Dollar is worth $1.03 US.

      Not much of a difference.

      The cost of business is significantly higher in Canada, that's what accounts for the higher prices. Your health-care is a large factor... Seems like a fair trade to me. I pay $250 US every month for insurance, you pay more for goods. It all comes from somewhere.


      Sent from my iPhone using ModMyi
    1. lov3christian's Avatar
      lov3christian -
      Quote Originally Posted by Sem656 View Post
      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
      just a note - xoom is superior on paper maybe but check out this quick benchmark of the ipad2 gpu vs the xoom gpu
      iPad 2: GPU Benchmarked with Impressive Gains - Mac Rumors

      And btw like has been said before any company has the right to price their product at whatever price point you are willing to pay for. Because we love them we buy them even at ridiculous prices (remember the first iPhone?)
    1. manickbarry's Avatar
      manickbarry -
      $14 for the CPU that's crazy cheap
    1. krosis's Avatar
      krosis -
      Quote Originally Posted by manickbarry View Post
      $14 for the CPU that's crazy cheap
      When you look at the size of the chips and the yield they're able to come up with, it's not unreasonable. I've heard of older cheaper ARM cores going for $1-3.

      Keep in mind that this whole thing is an educated "pulling numbers out of their ***" exercise. The details of Apple's contracts with their suppliers including actual cost is confidential. For example, how do you think they came up with the cost of a CPU that's not available outside of Apple's internal supply line? They just made up a number that's probably close to what it actually is.

      While I kind of want a Xoom, I don't know if I'd call it an unqualified "superior". The GPU is slower and the screen is cheaper with worse viewing angles.
    1. Bluemoldycheeze88's Avatar
      Bluemoldycheeze88 -
      The iPad 2 display is the same as the first generation correct?


      Sent from my iPhone using ModMyi
    1. epignosis567's Avatar
      epignosis567 -
      Quote Originally Posted by Wiley John Wright View Post


      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
      Gimme a break. That may be what it would cost YOU to make it, but if you don't think that apple is making at least a 3X markup you're a sucker.
    1. Gamma120's Avatar
      Gamma120 -
      Quote Originally Posted by Bluemoldycheeze88 View Post
      The iPad 2 display is the same as the first generation correct?


      Sent from my iPhone using ModMyi
      Basically, but I've heard it looks a lot clearer than the first one
    1. Sem656's Avatar
      Sem656 -
      Quote Originally Posted by Gamma120 View Post
      Basically, but I've heard it looks a lot clearer than the first one
      It's led backlit was the first?
    1. Ksherrera's Avatar
      Ksherrera -
      I just got a 13" MBP... I'm sitting on a towl.
    1. Dj dunn's Avatar
      Dj dunn -
      thats a great point they are only making about 35% profit which is very very low compared to cds, clothing, furniture. everybody should be thanking apple for the low price!
    1. EskimoRuler's Avatar
      EskimoRuler -
      Quote Originally Posted by Bluemoldycheeze88 View Post
      The iPad 2 display is the same as the first generation correct?


      Sent from my iPhone using ModMyi
      I read somewhere that's it is the same