New 16GB WiFi iPad costs $316.05 to manufacture, says iSuppli

Daniel Bader

March 17, 2012 8:45 pm

As it does with every new Apple product, iSuppli has taken the mystery out of how much money Apple is making on each new iPad. Though total costs are, on average, 9% higher than the iPad 2, with most of the increase going into the Retina Display, Apple still has nearly a 50% margin on each device when you factor in materials and manufacturing costs.

A 16GB WiFi iPad costs $316.05 USD to manufacture, and it sells for $499 in America and $519 in Canada. More expensive models like the 64GB LTE model costs $408.70 to manufacture, but sell for $829/$849, a margin of over 50%. Apple’s profits increase the more NAND memory is in the device, since it’s a marginal cost increase for them between 16/32/64GB chips, but they sell each model for $100 more than the last.

Samsung also seems to be a big winner here, providing nearly 40% of the internal components in the new iPad. Already confirmed are the LCD screen (though Sharp and LG are confirmed as future suppliers), the A5X processor and perhaps the NAND memory, though Toshiba and Hynix are sourced as well. iSuppli also suspects that Samsung is the supplier of the new iPad’s capacious 42Whr battery which, if true, would put them at roughly 50% of all the internal components.

And who says competition is bad for business?

Read the whole breakdown over at iSuppli.

  • Doug Page

    Paying for name recognition pays off!!!

    • Theywillbepissed

      Does anybody here want to go to hooters with me… the waitresses have massive jugs…. seriously, basketballs look at these boobs with envy… who is up for it?

    • Rio

      Except we are paying for a lot more than the hardware and brand.

      I pay for an amazing customer experience, where if something goes wrong with my phone or tablet it is fixed the same day or I’m given a brand new replacement. I pay for amazing support, if I don’t know how to do something I call and get an imdiate answer. Aegean after my warranty was done, I was given AppleCare support simply because it was a slow day. I got a free glass replacement on my phone because the tech felt he took longer than expected replacing it, even though it was only 20 mins.

      If something goes wrong your phone, you have to send it by mail and then wait for them to tell you of they can fix it and so on.

      People don’t understand customer experience, which is what the average consumer wants. So yes I am paying a premeium but I’m getting my
      Moneys worth for it. Not to mention other than fire sales the iPad is on par with all the tablets being released

    • Rio

      Also don’t forget R&D. These things don’t magically appear

  • bummy

    what baffles me is that the old 0.3mp lesn and the new 5mp lens is difference of 8 dollars.

    8 dollars. And they still slapped that 0.3 piece of s**t on a $500 equipment.

    • EvanKr

      Apple knows perfectly well thatched could’ve stuck the new 5MP shooter onto the older iPad, but then people wouldn’t have a decent motive to upgrade. Another example, Apple could’ve spent another $1 to put an in-board flash into it, but they’ll save that for the next generation so that the iSheep will be first in line to upgrade.

  • Accophox

    Actually. What baffles me more is why Samsung is still manufacturing Apple components, what with all the bad blood going on between them over the Galaxy series phones.

  • Dimitri.k

    Everyone knows you are paying for the name & not the hardware. If ONLY the companies would price the products as much as it costs to manufacture but they will not because they want to make money as well so they add another couple of hundred & there you go.

    • MonkeyFace

      You’re a dumba$$. What company in the world doesn’t operate on a for profit business model? Your comment is the most re-tarted comment ever posted.

  • Dimitri.k

    You are paying for the name. That is why Apple is rich & has more money then any other company. They charge us 250 – $300 more so they can make money so how right?

    If only the companies would price the products the same price as it is to manufacture the products. It sucks but this is the real world. Every company does this.

    Also Daniel you said “And who says competition is bad for business?” It is when Apple is taking each & every company to court. Maybe get off your high horse about Apple & look at it clear. Yes its good for business but also Samsung is loosing money by going to court each week because of Apple. Did you ever think of that? Apple should not even be suing them seeing as Samsung is the ones supplying them with all the stuff.

  • iTards

    How does it cost that much if the labor takes 0.75 cents a day? ha? nice try Apple.. we all know how you are using the kids in China…316$ my a$$

  • jon_d0e1

    and it still doesnt have hdmi output… i like every single normal user have a 25ft hdmi cable that i run from my main TV to the ceiling then to my couch where i sit to watch movies from tablet onto my tv. amazing stuff.

  • Danny

    Its pathetic that ifans say their tablet is better than Samsung when half the damn thing is Samsung parts…. really you bunch of hypocrites

    • RedArmada

      As much as I hate to defend Apple I have to admit that this new iPad is better than any tablet Samsung has to offer. The fact that they make 40% of the parts is irrelevant. I would LOVE to see Samsung give it their all and release a tablet that blows this out of the water but the fact is they havent (yet?). As it stands the “new” iPad and the second gen transformer prime are the best tablet out there.

  • Billa

    BULLSHIT… I think what you really mean is it costs 316 Inocent chinese people to make an Ipad..

  • TouchMyBox

    It’s nice to see them willing to take a bit of a cut into their profit margins.

    Now if they would only stop charging us $200 for $50 worth of flash memory.

  • Yash

    i will never give apple my money, till they make a product that is actually the price its worth. too pricey apple

  • Domingo

    I’d bet my left nut it does NOT cost that much.

  • stylinred

    does that include the massive wholesale pricing discount that foxconn gets?

  • Ctrl-Alt-Del

    If you believe those prices are what any one person would pay for those parts, you as gullible as any child that believes that Santa or the Easter buy exist.

    People who complain about Apple’s prices are … Simple.

    If you drive a ’94 Honda Civic and repair it with cheap parts, don’t expect it to have the same performance high end luxury vehicle.

  • LOL

    Nice try mobile syrup for not allowing me to post my comment.lol

  • GreatSavings

    Playbook costs $230 to make and they sell it at $150, that’s the difference between RIM and Apple:
    One “Leapfrogs the competition” the other one: makes money!

  • mast3rbug

    I can buy 16GB NAND flash chips in qty of 1000 for about 25$ each. So, I think the 16.80$ is really overpriced for a company that make products on a really high volume. So I think the cost of the total product is lower than 316$ and the BOM here is not true.

  • John

    They should be selling it for $350, giving them a healthy 10% profit margin. Because, you know, R&D is free…so is software development and supply chain management.

  • Anthony

    This BOM is only the material cost… then factor in all the R&D and money spent on software development, labor, shipping fees, and cost of maintaining all the Apple stores.. Why do you think Apple can charge $5 for something like GarageBand, which probably costed millions in Engineering time to develop? Do you guys have any idea how businesses work?