Apple iMac costs $898 to manufacture

Research firm iSupply disassembled a $1,299 Intel Core Duo based iMac from Apple and estimates it costs Apple $898 to assemble the iMac before loading it with software and packing it in a box.

The most expensive component in the iMac is the Intel Core Duo processor. Apple's paying about $265 apiece for the chip, iSuppli estimates. "We made a conservative guess that Apple is getting a 10% discount on that chip," says Andrew Rassweiler, manager of iSuppli's teardown team. "But Apple is Apple. It's such a tough negotiator, that discount could be higher."
>br> Two other Intel-made chips, which sit between the Intel Core Duo and other systems in the computer, cost $14 and $31, respectively, iSuppli says. That makes Intel's total silicon content in the new machine worth about $310, or more than one-third of the cost of materials, using the researcher's estimates.

More details over at BusinessWeek.