BillOfMaterials
Latest
Early estimates say new iPad cuts Apple's profit margins
These estimates are always to be taken with a grain of salt but, if UBM TechInsights is to be believed, Apple is cutting into its precious profit margins to keep the price of the iPad flat. According to the research firm, the total cost of components in the 16GB 4G model is around $310 -- not including assembly and shipping. With a final price of $629, Cupertino is pulling in about a 51 percent profit, a sizable drop from the estimated 56 percent profit margin on the similarly specced iPad 2 at launch. A large chunk of that increased cost of production is made up by the new retina display, which is estimated to cost around $70, and the LTE chipset, which UBM priced at $21. In contrast, current pricing on the panel in the iPad 2 and its 3G radio rest at around $50 and $10, respectively. We're sure Tim Cook isn't losing any sleep though, there are plenty of other ways to make up that lost dough -- like selling more iPads.
iSuppli pegs iPad component costs at as little as $259.60
This shouldn't come as a shock to anyone: just because Apple's touting the "magical" $499 pricepoint of the iPad doesn't mean they're selling it at a loss. After carefully poring over the iPad's internals, iSuppli has waved its hands in the air and added up a thoroughly guesstimated bill of materials as low as $259.60 for the 16GB iPad, including $95 for screen and $26.80 for the A4 processor. Sure, we suppose we can believe that, although that number doesn't really explina the final price tag, since it fails to include include gigantic costs like, oh, say, "development." The good news for us is that there's actually a lot more complexity inside the iPad than iSuppli was expecting, and that means the raw component prices might come down over time as things like the three-chip touchscreen controller get simplified over time. What might seem silly and wasteful at $499 could seem all-too-tempting at $299.
That $499 iPad only costs Apple $270; Wall Street analyst is elated
Apple is well-known in the consumer electronics world for relatively large margins on products. According to a bill of materials (BOM) breakdown on the iPad recently performed by BroadPoint AmTech analyst Brian Marshall, the iPad should be able to add a sizable chunk of money to Apple's bottom line. For the 16GB Wi-Fi iPad (US$499), Marshall found that the total BOM cost was $270.50. Manufacturing adds $10 to the cost, and warranty service costs add up to $20. In case you're wondering, the flash memory and the aluminum case both cost about $25, and the Apple A4 processor adds just $15 to the total cost of the iPad. While the entry-level iPad may appear to be a cash cow for Apple, the 32GB and 64GB Wi-Fi models add even more margin to the mix. The 32GB model costs only $25.50 more than the 16GB, but the suggested retail price is $100 more. Apple will really make money on the 64GB model, which costs $76.50 more than the 16GB device but sells for $200 more. Marshall had a chance to use an iPad, which led him to believe that "...this will be another grand slam product for Apple. The ergonomics and the 'media' experience of the device stood out the most to us." His original estimate was for Apple to sell about 2.2 million units in 2010. He's now expecting sales to be much higher. As an example, he feels that if Apple sells seven million units, calendar year earnings per share for Apple would rise from $12 to over $13. Marshall is definitely bullish on Apple, having rated AAPL a "buy" with a target price of $264 per share. Considering the trashing that Apple and most other tech stocks have taken recently, the company has long way to go -- and a lot of iPads to sell - before reaching that target price. [via Hardware Central]
Droid more valuable than Nexus One or iPhone 3GS according to iSuppli
Ah, here we go again: another report from iSuppli breaking down the bill of materials (BOM) for one of our favorite smartphones. This time it's the Droid / Milestone under scrutiny, Motorola's beefcake slider that currently sells for $560 month-to-month on Verizon ($199 on contract). According to iSuppli's analysis, Droid brings a $187.75 bill of materials that breaks down into $179.11 worth of components and $8.64 in manufacturing costs. Naturally, the BOM does not include licensing fees, software costs, accessories, or the massive outlay this device has received in advertising support. Nevertheless, it makes for interesting apples-to-apples fodder when comparing costs with the Nexus One ($174.15 in materials only), iPhone 3GS ($178.96 materials and manufacturing), and original Palm Pre ($138 materials and manufacturing). The single most expensive component on the Droid is the 16GB removable microSD card ($35) bundled with the Droid. And after a controversial MOTO report that demonstrated a lackluster capacitive touchscreen on the Droid, it's interesting to compare the Droid's 3.7-inch TFT LCD ($17.75) and capacitive touchscreen overlay ($17.50) with that of the iPhone 3GS ($19.25 spent on a smaller 3.5-inch LCD and cheaper $16 touchscreen overlay) and Nexus One (whopping $23.50 for 3.7-inch AM-OLED display and $17.50 for the touchscreen assembly). Rounding out the top-end costs are the Droid's 5 megapixel autofocus CMOS sensor ($14.25), Qualcomm baseband processor / RF chip ($14.04), and TI application processor ($12.90).
Nexus One hardware costs $174.15, US multitouch still priceless
If, while perusing the Nexus One teardown, you were doing a mental tally of just how much each internal part may cost, here's your chance to compare your numbers to some professionally obtained figures. iSuppli reports a preliminary estimate of $174.15 for the cost of materials needed to build each handset. The research firm also congratulates Google on keeping a bill of materials comparable to most recent smartphones while having "the most advanced features of any smart phone ever dissected by iSuppli's Teardown Analysis Service." Costliest of all things was the 1GHz Snapdragon ($30.50), followed by the AMOLED display ($23.50) and memory ($20.40) from Samsung. The Bluetooth and 802.11n WiFi transceiver cost $8.20, and perhaps the most egregious spend was $12.50 on a 5 megapixel camera that many of us might never use. Hilariously enough, Google has spent $17.50 on what is clearly identified as a "capacitive multitouch touchscreen assembly" from Synaptics, though enabling it clearly remains a bridge too far.
iSuppli: BlackBerry Storm costs $4 more than its purchase price to build
In a fiscal climate where profit margin reigns intensely supreme, we've got yet another dollop of bad news to heap upon the parfait of pain that is the $199 (after $50 mail in rebate) BlackBerry Storm. Research firm, iSuppli, estimates that the cost for the components and assembly of RIM's BlackBerry Storm are just shy of $203 -- an estimate that does not include software development and uh, bug fixing costs or those attributed to patent licensing, physical distribution, marketing or anything else in the product lifecycle. The most costly component is the $35 Qualcomm MSM7600 processor that gives the Storm its dual GSM / CDMA personality. Now, $203 isn't that big of a spread compared to the per unit cost of a $175 8GB iPhone 3G, $169 BlackBerry Bold, or $144 T-Mobile G1. However, the lost prophets profits add up quickly when you've moved over a million units globally.P.S. We're not implying that RIM is losing money here (the price is obviously carrier subsidized), only that the Storm is likely less profitable than its peers. But without knowing what VZW pays on a per unit basis, we can't say for sure who's getting the fiscal-shaft.
iSuppli says T-Mobile G1 costs $144 to make, nothing to love
Teardown specialist iSuppli is at it again, digging through the G1's guts this time around in an effort to wrap its inquisitive brain around the inaugural Android handset's bill of materials. The result? $144, which naturally doesn't reflect HTC's R&D -- an additional expense that might have been unusually low for the G1 considering HTC's overwhelming expertise in manufacturing all things mobile. For the record, this is about $30 less than iSuppli's July estimate for the 8GB iPhone 3G, though the comparison isn't terribly fair considering that the G1 has a mere pittance of internal storage by comparison. There's no telling what T-Mobile pays HTC for each and every G1 it sells, but we pay $179 (or less) on contract -- so it seems HTC is making itself a nice little profit right out of the gate and customers aren't footing much of the bill. At least, not until they've gone a few months into their two-year agreements.
