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IHS iSuppli: new iPad costs more to produce than iPad 2

in Blog, iPad, iSuppli, LTE
iPad 3

According to IHS iSuppli, 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. The 32GB LTE model’s bill of materials (BOM) is nearly 9 percent higher than an iPad 2 equipped with 32GB and 3G wireless, which carried a cost of approximately $335 at the time of product launch. Major factors driving up the BOM include the addition of the high-resolution Retina display, LTE wireless and a larger-capacity battery.

The new iPad, equipped with 32GB of NAND flash memory and LTE wireless capability, carries a BOM of $364.35. 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. The $364.35 BOM represents 50 percent of the $729.00 retail price of the 32GB LTE version of the new iPad.

Among all component suppliers, Samsung Electronics continues its reign as the big winner in the individual iPad analyzed by the IHS iSuppli Teardown Analysis Service. Samsung supplied both the display and the applications processor. The new iPad’s Retina display represents the most expensive single component in the tablet, at $87, while the applications processor costs an estimated $23. Combined, this gives Samsung a 30.2 percent share of the 32GB LTE version of the new iPad’s bill of materials, the largest for any supplier.  

In the individual new iPad analyzed, the NAND flash was supplied by Toshiba Corp. However, Samsung also is a source of NAND for the new iPad. In a 32GB LTE iPad where Samsung is also the supplier of the NAND, Samsung’s share of the BOM rises by $33.60 to a total of $143.60, amounting to 39.4 percent of the total BOM. However, Toshiba, Hynix Semiconductor and others also are all NAND suppliers to Apple, and each will claim a portion of those revenues.

Although we are not certain, IHS believes that the battery cells are supplied by Samsung. If this turns out to be the case, Samsung will account for nearly 50 percent of the new iPad’s BOM.

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