iPad Mini Component Costs Estimated to Begin at $188

[MacRumors]

AllThingsD reports on an iPad mini teardown from research firm IHS iSuppli estimating the component costs for Apple's new iPad mini at $188 for the 16 GB model.

The base model, a Wi-Fi-only 16 gigabyte iPad mini, which sells for a starting retail price of $329, costs about $188 to build. Adding additional memory -- the options are 32GB and 64GB -- adds only incremental cost but a fair amount of profit, amounting to an additional $90 for the 32GB version and $162 per unit on the 64GB model.

The report notes that approximately 43% of the device cost is related to the display, which adopts an expensive new process known as GF2 to reduce the part's thickness, although costs are expected to come down as the production process is refined.

The bill of materials estimate provides support for Apple CEO Tim Cook's claim that the iPad mini has been priced aggressively with a profit margin significantly below the company's average. While the entry-level iPad mini is priced at $329 for a product that costs Apple $199 to build, the iPhone 5 costs Apple just $10 more to build but sells for $649. The iPad mini is, however, more in line with the full-size iPad, which IHS iSuppli estimated to carry a bill of materials of $306 for the entry-level third-generation model at its launch earlier this year.

Article Link: iPad Mini Component Costs Estimated to Begin at $188

[bpcookson]

If it had a retina display, I'd pay $400 for baseline.
For now, no sale.

edit: Yes, I went and held it. Hogged one at the Apple store for a good 10 minutes.

[Leonard1818]

memory is so expensive these days.

[Mad Mac Maniac]

Anyone know what the component cost is for the MBA?

[mr jnvii]

Just can't help shaking my head at this.

edit: I totally get why they do this. Honestly, the iPad mini doesn't really surprise me. But the iPhone 5? Wow are they selling that for a profit...Would it really kill them to ease off just a little, you know?

[notjustjay]

Before everyone starts crying "So why isn't Apple selling it for $199?" remember that these are prices for the components only and do not cover costs such as research, engineering, testing, labour, warehousing, etc, etc, etc.

[RawBert]

It's a bargain at $329.

[crankmotion]

I'm sure Steve would have priced it 299,-. Just for the shock-and-awe feeling and a more attractive communication.

[MatLane]

It just goes to show apples build quality

[FooMan2011]

You know, that makes me sick... With the huge amount of product they sell, does the profit margins really need to be so high? 47% profit alone on the 16gb model. And what are they doing with the billion dollars they're getting from Samsung?

[Wokis]

So production cost is 90 dollars for an extra 16GB flash memory? I paid the eq of 50 dollars for a class 10 (though 30MB/s read) microsd card capable of 64GB.. What's the deal with apple's flash memory for it to cost so much for them?

[kirk26]

Originally Posted by RawBert

It's a bargain at $329.

Or a rip-off.

[kkent25]

They are not going to get a billion dollars from Samsung.

[NightFlight]

Originally Posted by RawBert

It's a bargain at $329.

No, it really isn't at all.

Not with the screen that it has, and especially not when you consider the non-iOS competition.

[Surely]

Originally Posted by FooMan2011

You know, that makes me sick... With the huge amount of product they sell, does the profit margins really need to be so high? And what are they doing with the billion dollars they're getting from Samsung?

You realize that this is just the cost of the COMPONENTS. It doesn't include R&D or any of their facility, salary, or assembly costs.


That being said, I wonder what the component cost would be with a retina display and an A6X.

That also being said, I love my mini, and think that $329 is a fair price.

[dagamer34]

Originally Posted by Wokis

So production cost is 90 dollars for an extra 16GB flash memory? I paid the eq of 50 dollars for a class 10 (though 30MB/s read) microsd card capable of 64GB.. What's the deal with apple's flash memory for it to cost so much for them?

It's where almost all companies make their profits. Why else do you think that the iPad doesn't have a microSD card slot?

I'm actually fine with what they charge, as I'm only getting the smallest memory configuration from now on.

[Winni]

Originally Posted by notjustjay

Before everyone starts crying "So why isn't Apple selling it for $199?" remember that these are prices for the components only and do not cover costs such as research, engineering, testing, labour, warehousing, etc, etc, etc.

And your point is?

Google and Amazon sell their tablets at these prices and probably with a loss because they expect to generate revenue through their content supply chain. That's a business model that is not alien to Apple; after all, they've also sold subsidized products in the past (like the original iPhone) and many of those billions that they have in the bank were made through the iTunes store and Apple's 30% tax on everything that's being sold in it.

[kkent25]

There are A LOT more costs in bringing a product to market then just the build costs.

[TimUSCA]

Anyone who is freaking out about not having a retina display has likely not even held an iPad mini in person. The screen is actually pretty good. No, it isn't retina, but it's certainly better than the iPad 2 screen, which really wasn't bad either.

After using my mini through the weekend, I'm in love. It's fast, looks nice, and is perfect to hold. There's really nothing to hate about it, and the price is good. Is it $200? No. But Apple isn't in the business of selling your information to advertisers, so they actually have a profit to make. And if you've ever used a $200 tablet, you'd see why they're $200. You get what you pay for. And in this case, you pay a little extra for something that isn't laggy as hell with a severely limited app store.

[Wokis]

Originally Posted by dagamer34

It's where almost all companies make their profits. Why else do you think that the iPad doesn't have a microSD card slot?

I'm actually fine with what they charge, as I'm only getting the smallest memory configuration from now on.

Note that i was talking about THEIR production cost. Seems to me they're not making as much profit on higher capacity models than what i've thought.

[Tankmaze]

Ha, i wish the iphone 5 16 gb can be price $329 off contract

[wrkactjob]

Originally Posted by RawBert

It's a bargain at $329.

$329 is a strange price

Originally Posted by crankmotion

I'm sure Steve would have priced it 299,-. Just for the shock-and-awe feeling and a more attractive communication.

Always with the 9 huh?...how about a 7?

$327....sounds better already.

[dagamer34]

Originally Posted by Surely

You realize that this is just the cost of the COMPONENTS. It doesn't include R&D or any of their facility, salary, or assembly costs.


That being said, I wonder what the component cost would be with a retina display and an A6.

That also being said, I love my mini, and think that $329 is a fair price.

A6X, not A6. The A6 isn't meant to push a 2048x1536 display. Just remember that the iPad Mini is a smaller iPad 2 and the iPad Mini 2 will almost certainly be a smaller iPad 4. Any variation from that will be a real headache for developers because they'll have to do iPad 3-like adjustments where the GPU wasn't really enough to power the display at full resolution in games.

[Banjhiyi]

Never believe everything you read on the internet.

[SgtPepper12]

Actually, this is a lot more than I expected. Remember these are just component costs.