New iPad more expensive to manufacture

A teardown of the new iPad by IHS iSuppli reveals Apple has lower margins on its third-generation iPad. The new tablets are offered at the same price points as their predecessors but have a higher production cost. The research firm estimates the new iPad with 32GB NAND flash memory and 4G LTE wireless capability has a total manufacturing cost of $375.10, nearly 9 percent more than the iPad 2's manufacturing cost at time of launch. However, considering that these tablets are sold for $729, the profit Apple is making off these tablets is still very high. Full details regarding the bill of materials (BOM) can be read at DigiTimes.

The new iPad, equipped with 32GB of NAND flash memory and 4G LTE wireless capability, carries a bill of materials (BOM) of US$364.35, according to a teardown analysis by IHS iSuppli. When the US$10.75 manufacturing costs are added in, the cost to produce the new iPad rises to US$375.10. The BOM of the 16GB 4G LTE version amounts to US$347.55, and the 64GB version is estimated at US$397.95.

The US$364.35 BOM represents 50% of the US$729.00 retail price of the 32GB LTE version of the new iPad, IHS said.

The very lowest-end version of the new iPad, with 16GB memory and no LTE, carries a combined BOM and manufacturing cost of US$316. The highest-end model, with 64GB memory and integrated LTE, has a total BOM and manufacturing expense of US$408.70, the teardown revealed.