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APPLE IPAD COMPONENTS MAY COST AS LITTLE AS $260, ISUPPLI SAYS

By NBF NEWS
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Apple Incorporated's iPad tablet computer cost as little as $259.60 to build, according to an analysis by market research firm ISuppli Corporation.

Bloomberg reported on Wednesday, that materials for the iPad, which went on sale on April 3, include a touch-screen display that costs $95 and a $26.80 processor designed by Apple and manufactured by Samsung Electronics Company, according to El Segundo, California-based ISuppli.

Analysis by ISuppli indicates that components of the lowest-priced, 16-gigabyte iPad amounts to 52 per cent of its retail price of $499. That leaves the iPad on par with other Apple products, including the iPhone 3GS. A high-end 64-gigabyte version of the iPad, which retails for $699, contains components that cost $348.10, according to ISuppli.

Much of the iPad's component costs went toward making the device appealing to use, said ISuppli principal analyst Andrew Rassweiler, who supervised the 'teardown' analysis of the product. More than 40 per cent of the iPad's cost are devoted to powering its touch-screen display and other components of the computer's user interface — 'what you see with your eyes and what you feel with your fingers,' he said. The distinctive aluminum casing on the back of the device contributed about $10.50 to cost of materials.

Apple spokeswoman Natalie Harrison declined to comment on ISuppli's findings.

Research firms conduct so-called teardown analysis of consumer electronics to determine component prices and makers and to estimate profit margins.

The estimate doesn't include costs for intangible items such as software development, advertising, patent licensing or shipping. In February, ISuppli had estimated that the least expensive iPad would carry a $219.35 cost of materials.

Once it took one apart, ISuppli found more silicon chips than it had expected to power interactions with the iPad's 9.7- inch screen.

'Because of the sheer scale of this device, we're seeing more here than we expected,' Rassweiler said. Apple uses three chips to control the iPad's touch screen, for example.

Over time, Apple may have leeway to combine many of the iPad's electronic components, or integrate them into the display, Rassweiler said.

'We'll see a lot less silicon required to make them work,' he said.

The most expensive component in the iPad is its touch- sensitive, custom-manufactured screen. South Korea-based LG Display Company, Samsung and Japan's Seiko Epson Corporation make the LCD display, according to ISuppli. Taiwan-based Wintek Corporation makes the glass overlay necessary to detect touches of users' fingertips.