14 DAY TRIAL // After UBM Techinsights carried out a preliminary assessment of the new iPad’s bill of materials, IHS iSuppli now comes with its own BOM report challenging the former’s results.
Before the new iPad had become physically available, UBM estimated that a 32GB LTE iPad 3 cost $310 to make.
According to a report by IHS iSuppli, whose results are based on a real teardown of the tablet computer, the bottom line is slightly higher.
“The new iPad, equipped with 32 Gigabytes (GB) of NAND flash memory and 4G Long Term Evolution (LTE) wireless capability, carries a bill of materials (BOM) of $364.35,” says IHS.
“When the $10.75 manufacturing costs are added in, the cost to produce the new iPad rises to $375.10. The BOM of the 16GB 4G LTE version amounts to $347.55, and the 64GB version is estimated at $397.95,” reads their report.
At $364.35, the BOM represents 50 percent of the $729.00 retail price of the 32GB LTE iPad. The research firm determined that the 16GB version with no LTE carries a combined BOM and manufacturing cost of $316, while the high-end model with 64GB NAND Flash and LTE costs $408.70 to source the parts and assemble.
“The new iPad is more expensive to produce than the iPad 2 at the time of product launch, even though the retail price points are the same,” says IHS.
IHS provides a table that summarizes the major components in the new iPad. According to the chart, the new iPad’s Retina display represents the most expensive single component in the tablet. It costs $87 (compared to $57 for the display used in the iPad 2). The A5X processor costs an estimated $23.
“The Retina display represents the centerpiece of the new iPad and is the most obvious enhancement in features compared to previous-generation models,” said Andrew Rassweiler, senior principal analyst, teardown services, at IHS.
“The first two generations of the iPad employed the same type of display—a screen with resolution of 1,024 by 768 pixels. For the third-generation new iPad, Apple has taken a significant step up in display capabilities and expense, at four times the resolution and 53 percent more cost,” added Rassweiler.
IHS asks readers to note that their teardown assessments are preliminary in nature, and that they account only for hardware and manufacturing costs. Their analysis does not include additional expenses such as software, licensing, and royalties.