16GB iPad components estimated to cost Apple $219

Posted:
in Current Mac Hardware edited January 2014
Parts for Apple's forthcoming iPad, which will retail starting at $499, are estimated to cost the hardware maker as little as $219.35, a new analysis has calculated.



iSuppli Corp. said the multi-touch 9.7-inch display on the iPad could cost around $80, while its custom-designed A4 processor, believed to be manufactured by Samsung, would cost about $17 per unit -- $2 more than the chip that lies in the iPhone 3GS. In addition, the 16GB of memory is estimated to cost about $29.50.



With a total parts cost of $219.35, that's well below the starting price of $499 for the 16GB iPad, which does not offer 3G connectivity. Factoring manufacturing costs add just $10 to the total cost of the low-end model, bringing it to $229.35.



However, the $499, 16GB model is also predicted to be the least profitable version of the hardware for Apple to sell.



iSuppli projects Apple will earn the most from selling the 32GB version with a built-in 3G radio, which will sell for $729. The combined materials and manufacturing costs for that model is estimated to cost Apple just $287.15.



The findings lend support to a recent report that Apple could lower the price of the iPad if initial sales are not as strong as the company hopes. That information was revealed this week after executives from the Cupertino, Calif., company allegedly told one analyst. Management allegedly said it "will remain nimble" in pricing the iPad.



Arguably the biggest surprise of the iPad's unveiling was its $499 starting price. Previously, analysts had expected the new touchscreen tablet to cost around $1,000.







3G connectivity on the hardware carries a $130 premium, making the 16GB model $629. The iPad will offer up to 64GB of capacity which, when paired with a 3G radio, will make the device cost $829 at its highest price. The 64GB of capacity will cost Apple an estimated $118 per unit, iSuppli said.
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Comments

  • Reply 1 of 209
    Is that greed or what?

    Expect it at $399 by July 1st.
  • Reply 2 of 209
    Quote:
    Originally Posted by TEKSTUD View Post


    Is that greed or what?

    Expect it at $399 by July 1st.



    I never understood this complaint. We live in a capitalist society, companies have the right to charge whatever the market will bear. Microsoft charges 200-300 dollars for a Vista service pack called Windows 7. Adobe charges almost 2,500 dollars for CS4. GM charges you more for a Cadillac than a Chevrolet. Apple has every right to charge whatever they want for their products. Would I like to see it cheaper? Of course. I'd like to just be given one, but that's not how things work.
  • Reply 3 of 209
    Quote:
    Originally Posted by hittrj01 View Post


    I never understood this complaint. We live in a capitalist society, companies have the right to charge whatever the market will bear. Microsoft charges 200-300 dollars for a Vista service pack called Windows 7. Adobe charges almost 2,500 dollars for CS4. GM charges you more for a Cadillac than a Chevrolet. Apple has every right to charge whatever they want for their products. Would I like to see it cheaper? Of course. I'd like to just be given one, but that's not how things work.



    tekstud is a well know troll so anything he reads on here he'll troll about

    just add him to your ignore list and be done with it...
  • Reply 4 of 209
    finetunesfinetunes Posts: 2,065member
    This about the second or third time a report like this has posted. Even this report is posted on several sites and I have made my comment on Mac 9 to 5. I don't know which of these posted first, but I responded to the first one I read.
  • Reply 5 of 209
    This is insane. I don't care paying that much, I really don't, for a good Apple product but damn! No camera, no multitasking in the OS, no connectivity (you have to buy adapters!) and a long list of other 'no's make the iPad a much less attractive product every day.



    Really, the iPad is a great product in diapers... I'll wait to get at least the teenage version
  • Reply 6 of 209
    Quote:
    Originally Posted by hittrj01 View Post


    I never understood this complaint. We live in a capitalist society, companies have the right to charge whatever the market will bear. Microsoft charges 200-300 dollars for a Vista service pack called Windows 7. Adobe charges almost 2,500 dollars for CS4. GM charges you more for a Cadillac than a Chevrolet. Apple has every right to charge whatever they want for their products. Would I like to see it cheaper? Of course. I'd like to just be given one, but that's not how things work.



    As a New Yorker -we never buy at retail. And we know when we're being had (except by Bernie).

    Pay as much as you like- we live in a free society.
  • Reply 7 of 209
    Quote:
    Originally Posted by FullGaz View Post


    Really, the iPad is a great product in diapers... I'll wait to get at least the teenage version



    AKA- "hobby".
  • Reply 8 of 209
    Quote:
    Originally Posted by doyourownthing View Post


    tekstud is a well know troll so anything he reads on here he'll troll about

    just add him to your ignore list and be done with it...



    NO troll- just a realist.

    And what are you?
  • Reply 9 of 209
    solipsismsolipsism Posts: 25,726member
    Gotta love iSuppli for having component breakdowns of a product 2 months before it launches. But I'm being too hard on them since this is about as accurate as their other claims. Now we get an entire thread of trolls claiming Apple is ripping everyone off because they are not selling it at that price while is well below the actual cost.





    Quote:
    Originally Posted by doyourownthing View Post


    tekstud is a well know troll so anything he reads on here he'll troll about

    just add him to your ignore list and be done with it...



    I think the term troll was coined to describe him. Seriously, what's the point of deleting his account if they are just going to let him continue his antics under a new name where newer posters can't see his long term trollish behaviour. They should change the Title of his account to red stating Troll instead of Registered User.





    Quote:
    Originally Posted by FineTunes View Post


    This about the second or third time a report like this has posted. Even this report is posted on several sites and I have made my comment on Mac 9 to 5. I don't know which of these posted first, but I responded to the first one I read.



    First time for AI. For Apple news, this is one of the few places I monitor in my RSS.
  • Reply 10 of 209
    mr. memr. me Posts: 3,221member
    Quote:
    Originally Posted by TEKSTUD View Post


    Is that greed or what?

    Expect it at $399 by July 1st.



    Go buy the parts, build it yourself, and let the rest of us live in peace.
  • Reply 11 of 209
    Quote:
    Originally Posted by TEKSTUD View Post


    Is that greed or what?

    Expect it at $399 by July 1st.



    It's all about whatever the market can bear, Tek.
  • Reply 12 of 209
    postulantpostulant Posts: 1,272member
    Quote:
    Originally Posted by hittrj01 View Post


    I never understood this complaint.



    Socialist are difficult people to understand.
  • Reply 13 of 209
    Quote:

    Factoring manufacturing costs add just $10 to the total cost of the low-end model, bringing it to $229.35.





    Wow! Only $10 a unit to manufacture, boy those machines work cheap.



    Reminds me of that huge Budweiser plant I toured, nearly completely automated. 5 people worked the whole floor, making 1000's of cans of beer a second. The there were more tour guides and truck drivers carting off the beer and bringing supplies than factory workers.



    Maybe Apple could due away with a little profit, say $50 a unit, and give some people in U.S. jobs pushing paper around, brainstorming or something.



    Remember, a economy works when what goes around, comes around.



    Keep "take, take, take" and nobody will have nothing eventually.
  • Reply 14 of 209
    onhkaonhka Posts: 1,025member
    Quote:
    Originally Posted by TEKSTUD View Post


    Is that greed or what?

    Expect it at $399 by July 1st.



    I gather you have the expertise to price out the variables and other fixed costs.



    What do you think that they should charge/assign/account just for:
    • Research & Development

    • Packaging

    • Advertising/Promotion

    • Sales & Marketing

    • Distribution/Shipping

    • Accounting

    • Legal

    • On-line/In-Store Support

    • OS

    • Apps

    • iTunes App/iBook Book Store

    • Third-Party Licenses

    • Liability Insurance

    • Fixed Overheads, e.g., equipment depreciations/property taxes/salaries

    • Keeping Green

    Or don't you believe in free enterprise?
  • Reply 15 of 209
    Anyone know what the iPod Touch margin was at launch (1st, 2nd, or 3rd gen)?

    - preferably from iSupply



    - this would tell us if Apple is charging more than it's usual margin, and therefore whether or not we can expect a price cut....
  • Reply 16 of 209
    You are all retarded:



    None of you have made mention other business expenses which include but are not limited to:



    R&D, salaries, insurance (health, workers compensation, liability, property etc.), legal, taxes (payroll, property, capital gains, income), marketing, support, software development and deployment, maintenance, tooling, servers, utilities etc.



    I need not make an exhaustive list to support this point: products cost far more than the sum of their parts to bring to market. Profit does not equal retail price minus cost of parts, idiots.
  • Reply 17 of 209
    Quote:
    Originally Posted by MacTripper View Post


    Wow! Only $10 a unit to manufacture, boy those machines work cheap.



    Reminds me of that huge Budweiser plant I toured, nearly completely automated. 5 people worked the whole floor, making 1000's of cans of beer a second. The there were more tour guides and truck drivers carting off the beer and bringing supplies than factory workers.



    Maybe Apple could due away with a little profit, say $50 a unit, and give some people in U.S. jobs pushing paper around, brainstorming or something.



    Remember, a economy works when what goes around, comes around.



    Keep "take, take, take" and nobody will have nothing eventually.



    Where do you think the other $260 goes? It doesn't all go to investors or Apple's cash pile. A huge amount of that goes to American engineering jobs. $220 manufacturing component cost doesn't go to packaging, marketing, shipping, overhead, engineering, etc.



    BTW, that isn't the way the economy works.
  • Reply 18 of 209
    wizard69wizard69 Posts: 13,377member
    Quote:
    Originally Posted by TEKSTUD View Post


    Is that greed or what?



    Generally the 2X factor is a good place to start when pricing something for retail. Even then success is not assured.



    If you go to the hardware store to buy ten screws for 4.99 you don't really believe they cost $0.50 to make do you? The reality is they cost significantly less than that to make.



    As to these estimates they are shotgun figures thrown about based on informed guesses. Apple however has not released enough info to determine the actual cost to manufacture. For example how much RAM is in the device or what exactly is A4 made up of. ARM IP costs could be anywhere from 0.50 to $2.50 per chip depending upon the IP included. The guesses are not bad though and come close to my own. Personally I think $30 has to be added to the total for the out of the factory cost.

    Quote:

    Expect it at $399 by July 1st.



    That depends. If Apple really wanted to stimulate sales they would double the flash in the base model and quadruple it in the high end model. This will have a greater impact on sales and is something easily done within the current hardware. The reality is 16GB in the lowend model makes it unsalable. At least to anybody with any sense.



    In anyevent before complaining about the price how about running a business yourself successfully. It is no where as easy as some imply.
  • Reply 19 of 209
    onhkaonhka Posts: 1,025member
    Quote:
    Originally Posted by [email protected] View Post


    You are all retarded:



    None of you have made mention other business expenses which include but are not limited to:



    R&D, salaries, insurance (health, workers compensation, liability, property etc.), legal, taxes (payroll, property, capital gains, income), marketing, support, software development and deployment, maintenance, tooling, servers, utilities etc.



    I need not make an exhaustive list to support this point: products cost far more than the sum of their parts to bring to market. Profit does not equal retail price minus cost of parts, idiots.



    Retards I could take. It it the asshole at the other end that bothers me.
  • Reply 20 of 209
    nasseraenasserae Posts: 3,166member
    Quote:
    Originally Posted by [email protected] View Post


    You are all retarded:



    None of you have made mention other business expenses which include but are not limited to:



    R&D, salaries, insurance (health, workers compensation, liability, property etc.), legal, taxes (payroll, property, capital gains, income), marketing, support, software development and deployment, maintenance, tooling, servers, utilities etc.



    I need not make an exhaustive list to support this point: products cost far more than the sum of their parts to bring to market. Profit does not equal retail price minus cost of parts, idiots.



    It clearly states in the title "components" but believe me some people here have reading deficiency and lack of comprehension
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