Teardown of Manufacturing Costs for New iPad

Apple's new iPad (the 32GB Wi-Fi+4G LTE version) carries a Bill of Materials (BOM) for $364.35; include a $10.75 manufacturing charge and it goes up to $375.10. Similarly, the BOM for the 16GB 4G LTE and 64GB 4G LTE models are $347.55 and $397.95 respectively, a press release by iSuppli suggests.

The retail prices set by Apple, for the 16GB, 32GB and 64GB models are $629.00, $729.00 and $829.00, respectively. Essentially, the BOM for the 32GB LTE version represents 50 percent of the actual retail price. Surprisingly though, the 32GB Wi-Fi+4G LTE version of the new iPad is priced only 9 percent higher (about $335) than the 32GB+3G model of iPad 2.

The teardown assessment report suggests the lowest priced model of the new iPad - the 16GB without LTE support - costs $316 to make, including manufacturing costs.

According to the analysis by IHS iSuppli Teardown Analysis Service, Samsung Electronics supplied both the display and the processor for the new iPad. The most expensive component of the new iPad was the high resolution Retina Display that cost $87. The NAND flash was supplied by Toshiba Corp.

"The Retina display represents the centerpiece of the new iPad and is the most obvious enhancement in features compared to previous-generation models. The first two generations of the iPad employed the same type of display-a screen with resolution of 1,024 by 768 pixels. For the third-generation new iPad, Apple has taken a significant step up in display capabilities and expense, at four times the resolution and 53 percent more cost," said Andrew Rassweiler, Senior Principal Analyst, Teardown services at IHS.

The touch-screen for the new iPad costs $40, with the wireless service costing $41.50. The A5X processor used for the new iPad costs $23. The two cameras of the new iPad cost a total of $12.35 and the Lithium Polymer battery in the new iPad costs $32.00.

"The NAND flash memory is one of the key profit-generating components for Apple in the new iPad line, as it has been in previous iPads and in the iPhone family. Apple makes far and away more money in selling consumers NAND flash than NAND flash manufacturers make selling it to Apple. And the more flash in the iPad, the higher the profit margin there is for Apple," added Rassweiler.

Must Read:

Retina-Enabled: Great Apps for Apple's New iPad

Apple New iPad: Top Award-Winning Tablets to Challenge Apple's Latest [SLIDESHOW]