iPad Components Cost As Little As $220

Sonist · 02-10-2010, 05:07 PM

From Business Week:

"Apple's (AAPL) iPad tablet computer, introduced Jan. 27, may have component costs of as little as $219.35, according to a preliminary estimate by market research firm iSuppli.

Materials for the iPad, due to go on sale in March and April, include a multitouch-screen display that may cost about $80 and a $17 processor designed by Apple and manufactured by Samsung, according to El Segundo (Calif.)-based iSuppli.

Even the lowest-priced iPad, with 16 gigabytes of memory and a retail price of $499, may be beyond the reach of some budget-conscious consumers, analysts have said. The relatively low price of the iPad's materials gives Apple scope to reduce the retail price over time, iSuppli analyst Francis Sideco says.

"There's certainly a decent amount of headroom in there," Sideco says.

...

Credit Suisse (CS) analyst Bill Shope fueled speculation over price cuts when he released a research note Feb. 8 saying Apple may be flexible on pricing if the iPad doesn't attract as many buyers as hoped. "While it remains to be seen how much traction the iPad gets initially, management noted that it will remain nimble, ...."

kjk · 02-10-2010, 05:26 PM

Remember, the 2nd iPad costs $220. The 1st one costs $220 million.

Sonist · 02-10-2010, 05:33 PM

True. I did find this sentence interesting, though:

"Apple may be flexible on pricing if the iPad doesn't attract as many buyers as hoped. "While it remains to be seen how much traction the iPad gets initially, management noted that it will remain nimble, ...."

It indicates, that they are prepared for an iPhone/Apple TV-like price cut.

It also serves as a warning to competitors thinking of jumping in and trying to undercut the iPad.

kjk · 02-10-2010, 05:45 PM

Quote:

Originally Posted by Sonist

It also serves as a warning to competitors thinking of jumping in and trying to undercut the iPad.

Yes...I think that's been the thing for Apple lately. On a financial conference call just a couple years ago, Apple mentioned "not leaving a price umbrella underneath us" in regards to keeping the iPhone competitive, and then 8 months later priced the 3GS at $199, and the 3G at $99.

I'm really curious how they juggle the iPhone, iPad, and Touch prices from here on out.

SCION · 02-10-2010, 06:02 PM

Quote:

Originally Posted by kjk

I'm really curious how they juggle the iPhone, iPad, and Touch prices from here on out.

Same here!

scottjl · 02-10-2010, 06:36 PM

note the "may" cost.. no one knows for sure but apple. and like most corporations, they are out to make a profit. if people are willing to pay whatever price apple sets, then they must be happy with it.

Bremen Cole · 02-10-2010, 06:54 PM

I never quite understand the relevance of these estimates of components. Of course the individual components are less than the whole. If it's no big deal then why not just buy the components and cobble it together yourself.... Companies have months if not years of R&D, then purchase the components, pay for assembling, design and put them in packaging, ship them across the world, pay for marketing, ship them to individual retail stores, then finally they are sold. Fact is if the components actually cost that much (all this is based on a educated guess), it seems to me it is a bargain to consumers.

Fact is most electronic devices are really bargains compared to other types of products. You would not believe the profit and high mark up in the jewelry industry...

tomsem · 02-10-2010, 09:03 PM

This has a nice table of the 'teardown': http://news.cnet.com/8301-13924_3-10450987-64.html

As with iPod there's a huge markup on NAND Flash (probably the only Flash that will ever run on this device <g>).

02-10-2010, 05:07 PM	#1
Sonist Apeist Posts: 2,126 Karma: 381090 Join Date: Oct 2008 Location: The sunny part of California Device: Generic virtual reality story-experiential device	iPad Components Cost As Little As $220 From Business Week: "Apple's (AAPL) iPad tablet computer, introduced Jan. 27, may have component costs of as little as $219.35, according to a preliminary estimate by market research firm iSuppli. Materials for the iPad, due to go on sale in March and April, include a multitouch-screen display that may cost about $80 and a $17 processor designed by Apple and manufactured by Samsung, according to El Segundo (Calif.)-based iSuppli. Even the lowest-priced iPad, with 16 gigabytes of memory and a retail price of $499, may be beyond the reach of some budget-conscious consumers, analysts have said. The relatively low price of the iPad's materials gives Apple scope to reduce the retail price over time, iSuppli analyst Francis Sideco says. "There's certainly a decent amount of headroom in there," Sideco says. ... Credit Suisse (CS) analyst Bill Shope fueled speculation over price cuts when he released a research note Feb. 8 saying Apple may be flexible on pricing if the iPad doesn't attract as many buyers as hoped. "While it remains to be seen how much traction the iPad gets initially, management noted that it will remain nimble, ...."

02-10-2010, 06:54 PM	#7
Bremen Cole Wizard Posts: 1,115 Karma: 2718 Join Date: Dec 2009 Location: Texas Device: iPad	I never quite understand the relevance of these estimates of components. Of course the individual components are less than the whole. If it's no big deal then why not just buy the components and cobble it together yourself.... Companies have months if not years of R&D, then purchase the components, pay for assembling, design and put them in packaging, ship them across the world, pay for marketing, ship them to individual retail stores, then finally they are sold. Fact is if the components actually cost that much (all this is based on a educated guess), it seems to me it is a bargain to consumers. Fact is most electronic devices are really bargains compared to other types of products. You would not believe the profit and high mark up in the jewelry industry... Last edited by Bremen Cole; 02-10-2010 at 06:59 PM.

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02-10-2010, 05:26 PM	#2
kjk . Posts: 3,408 Karma: 5647231 Join Date: Oct 2008 Device: never enough	Remember, the 2nd iPad costs $220. The 1st one costs $220 million.

02-10-2010, 05:33 PM	#3
Sonist Apeist Posts: 2,126 Karma: 381090 Join Date: Oct 2008 Location: The sunny part of California Device: Generic virtual reality story-experiential device	True. I did find this sentence interesting, though: "Apple may be flexible on pricing if the iPad doesn't attract as many buyers as hoped. "While it remains to be seen how much traction the iPad gets initially, management noted that it will remain nimble, ...." It indicates, that they are prepared for an iPhone/Apple TV-like price cut. It also serves as a warning to competitors thinking of jumping in and trying to undercut the iPad.

02-10-2010, 06:36 PM	#6
scottjl Reader of Books Posts: 1,632 Karma: 2697 Join Date: Oct 2009 Device: none	note the "may" cost.. no one knows for sure but apple. and like most corporations, they are out to make a profit. if people are willing to pay whatever price apple sets, then they must be happy with it.

02-10-2010, 09:03 PM	#8
tomsem Grand Sorcerer Posts: 6,464 Karma: 25996225 Join Date: Apr 2009 Location: USA Device: iPhone 15PM, Kindle Scribe, iPad mini 6, PocketBook InkPad Color 3	This has a nice table of the 'teardown': http://news.cnet.com/8301-13924_3-10450987-64.html As with iPod there's a huge markup on NAND Flash (probably the only Flash that will ever run on this device <g>).

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