iSuppli reveals iPad BOM
El Segundo, Calif. — The mid-range, 3G-wireless version of Apple Inc.’s iPad is expected to have a bill of materials (BOM) and manufacturing cost of $287.15, reports iSuppli. This will make it Apple’s most profitable iPad product, according to a virtual teardown generated with the help of iSuppli’s Mobile Handset Cost Model tool.
iSuppli estimates that the mid-priced version of the iPad equipped with 32 Gbytes of NAND flash memory and 3G wireless capability will contain $275.95 worth of components and other materials, and cost $11.20 to manufacture. The market researcher notes that the cost estimates do not include other expenses such as software, royalties and licensing fees.
“At a BOM and manufacturing cost of $287.15, and a retail price of $729, the 32 Gbyte/3G version is expected to generate the highest profit of any member of the iPad line on a percentage basis,” said Dr. Jagdish Rebello, senior director and principal analyst for iSuppli, in a statement. “The 32-Gbyte versions of the iPad cost only $29.50 more to produce than the 16-Gbyte versions, but their retail pricing is $100 higher. This shows that Apple believes the highest-volume opportunity for the iPad resides in the mid range of the product line.”

The 32 Gbytes of NAND flash in the mid-range iPad costs an estimated $59, compared to $29.50 for the 16 Gbtyes in the low-end version, says iSuppli.
The iPad’s display and touch-screen interface represents the most expensive segment of the system, accounting for 29 percent, or $80, of the BOM for the mid-range 3G model, according to Vinita Jakhanwal, principal analyst for iSuppli.
The display uses in-plane switching (IPS) technology, which supports a wider viewing angle and better picture quality in terms of presentation of color than conventional LCDs, says iSuppli. LG Display and Innolux are the two most likely suppliers of the iPad’s IPS LCD, and the touch-screen controller is likely supplied by Texas Instruments Inc., according to the market researcher.
The second most expensive part in the BOM is likely the NAND flash memory, accounting for 21.4 percent of the total BOM for the mid-range 3G model, according to iSuppli. Based on previous teardowns, iSuppli believes the most likely suppliers are Samsung Electronics Co. Ltd. and Toshiba Corp.
The applications processor and DRAM are expected to cost $28.90, representing 10.5 percent of the mid-range 3G model’s total BOM. The A4 processor is expected to cost $17. iSuppli believes the processor integrates an ARM RISC architecture microprocessor and a graphics processing unit and was designed by low-power processor specialist PA Semi, a fabless semiconductor company Apple acquired in 2008. iSuppli believes the device most likely will be manufactured by Samsung.
The iPad is expected to include 512 Mbytes of DRAM, costing $11.90, most likely from Hynix Semiconductor Inc., although Apple has used a variety of DRAM suppliers in the past.
The cost of the wireless subsystem, comprised of the baseband IC, the radio frequency components, the power amplifier and other parts, is estimated to cost $24.50, equal to 8.5 percent of the BOM of the mid-range version, according to iSuppli. The wireless chipset is likely supplied by Infineon, which also supplies the iPhone 3GS, according to the researcher.
Other components include interface devices (including an accelerometer, compass, audio codec and other components) at a cost of $10.20, the wireless LAN, Bluetooth and FM module at a cost of $8.05 and the GPS chip at a cost of $2.60, estimates iSuppli.
Touch user interfaces have made significant advances in the consumer electronics market particularly for mobile phones and notebook computers, opening the door for adoption in other applications including white goods, computer peripherals, medical equipment, and instrumentation. Synaptics made its debut in the home appliance market earlier this year with the launch of the Samsung Hauzen ZERO air conditioner.
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