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iPad component cost re-estimated


Now that the iPad is actually out and we know what's in it, iSuppli has adjusted its guesstimate for the actual price of the hardware to US$259.60. That's significantly more than the original estimate that was made a while back; iSuppli says that the iPad uses more silicon chips than expected, including three separate chips to control the touchscreen itself. That price is the 16GB Wi-Fi model (that retails for $500); the higher memory models obviously cost more (up to $348.10 for the 64GB Wi-Fi model).

Still, Apple is making a solid profit on the per-unit price. There's no question that the iPad will make money no matter what, but there are tons and tons of other factors to include in this. On the flip side of the equation, this price doesn't include shipping out iPads to all of Apple's various stores, money to pay employees, and of course, all of the backend software and hardware design that went into actually creating these devices in the first place. Of course, in terms of profit, the price that you pay for the device at checkout is just the beginning; there's a lot of money also flowing over the App Store, and in iBooks and so on. Just looking at the hardware costs won't get you very far. Apple has money moving all over the place around this device.

However, what it does show you is that Apple has gotten very, very good at keeping hardware costs down and maximizing, both, hardware and software design. When the iPad was first announced, a few of us were shocked (myself included) at the price; we'd previously believed that the charge would be $1000 minimum for an Apple tablet. This analysis shows that, not only did Apple squeeze it down under $500, but the hardware and background costs were kept reasonably low as well.

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