iPad 2 cost only a few dollars more to build than original iPad

By , Network World |  Mobile & Wireless, hardware, ipad

An analysis of iPad 2 finds that Apple's total cost to produce the tablet is almost identical to that of the original iPad introduced a year ago.

Apple was able to keep costs down despite the fact that a number of iPad 2 components, including the display subsystem and battery, are considerably more expensive than those of the original tablet.

The analysis breaks down the components of the iPad 2, assigns a price tag for each, and estimates the actual manufacturing costs to come up with a total. There's only a $3 difference between the GSM- and CDMA-equipped 32GB iPad 2 models: $336.60 for the former, $333.25, according to IHS iSuppli.

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Most of that total is a tally of the bill of materials (BOM) -- all the chips, memory, the display components, and so on -- totaling $326.60 for the GSM model, and $323.25 for the CDMA model. iSuppli estimates the cost to manufacture each tablet is $10.

The most expensive components: display, at $127; memory (for the 32GB model) at $65.70; mechanical/electrical (enclosure, connectors, etc.), at $35; and the battery, at $25.

The total BOM for the iPad 2 is only just a few dollars more than the total for the original iPad, which iSuppli put at $320 when it the tablet was released in April 2010.

Among other things, Apple may have been able to leverage its supply chain relationships in light of the much higher anticipated unit sales of iPad 2. The original iPad sold about 15 million units in the nine months it was available in 2010. Estimates of iPad 2 sales typically start at about twice that and go up.


Originally published on Network World |  Click here to read the original story.
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