iSuppli increases iPad cost estimate

The Apple iPad dedicates some 40 per cent of its bill-of-materials cost to the display, touch screen and other user interface components, according to a teardown conducted by iSuppli.

The combined costs of user-interface-related components in the iPad amounts to $109.50, representing 43.7 per cent of total BOM of the 16Gbyte, non-3G version of the iPad torn, iSuppli said.

“While the iPad has the potential to change the game in the computing, wireless and consumer worlds, it already has changed the game of how many electronic products are—and will be– designed,” said Andrew Rassweiler, director and principal analyst and teardown services manager for iSuppli. “The iPad’s design represents a new paradigm in terms of electronics cost structure and electronic content. Conventional notebook PCs are ‘motherboard-centric’, with all the other functions in the system—such as the display, the keyboard and audio—peripheral to the central microprocessor and the main printed circuit board (PCB) at the core. With the iPad, this is reversed. Everything is human-machine-interface-centric, with the PCB and Integrated Circuits (ICs) all there to facilitate the display of content as well as user inputs.”

Based on its physical teardown, iSuppli estimates the BOM of the low-end 16GB, non-3G iPad at $250.60. When manufacturing expenses are added, the cost rises to $259.60. This cost is higher than iSuppli’s virtual teardown estimate issued in February of a $219.35 BOM and $229.35 manufacturing cost. Cost for the display, the battery, the user interface chips and the power management Integrated Circuits (ICs) all exceeded iSuppli’s initial estimates, driving up the total BOM.

The teardown costs account only for hardware and manufacturing and do not include other expenses such as software, royalties and licensing fees.
The single most expensive component in the iPad is the display, priced at $65 and representing 25.9 per cent of the product’s BOM. The display is a 9.7-inch diagonal, 262,000-color TFT-LCD with a resolution of 1024 by 768 pixels. It employs In-Plane Switching (IPS) technology, which supports a wider viewing angle and better picture quality in terms of presentation of color than a conventional LCD.

“The display represents a customised implementation of an IPS panel, driving up its cost relative to a more commoditised netbook panel,” Rassweiler said.

The next most expensive component is the touch screen assembly at a cost of $30, or 12 per cent of the BOM. The touch screen assembly is 9.7-inches in the diagonal dimension and uses capacitive technology.

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