Analyst: 32GB iPad Costs $287.15 to Make
Another research firm is reporting how much it costs Apple to build it’s new iPad. ISupply said the 32GB version with 3G costs $287.15 for the parts and manufacturing. The iPad’s low cost to build may provide the Cupertino, Calif. company the “wiggle” room to lower the device’s retail price if needed.
Although the iPad’s parts cost $219.35, the $80 multi-touch screen and $17 processor adds to the final tally, according to iSuppli. Even so, the 32GB iPad costs only to build is only 39.4 percent of the eventual retail price, the analysts said.
Credit Suisse analyst Bill Shope said Apple officials are intent on staying “nimble” on iPad pricing, should a cut be needed to fuel consumer demand. “If they had to reduce the retail price, they certainly could,” iSuppli analyst Francis Sideco told BusinessWeek.
Earlier this month, Broadpoint AmTech analyst Brian Marshall said the low-end $499 iPad costs just $270 to build. Apple sees the biggest profit from the 3G radio which costs the company just $16 but adds $130 to the retail price. Another high-margin item in the iPad is memory. Although 32GB costs Apple just $25.50, it tacks on $100. While 64GB costs Apple only $76, the added memory costs consumers $200 more.
- Via 9to5Mac and BusinessWeek
Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.
