How Much Does it Cost to Build an Ipad?

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The iPad is going to be pretty expensive. Even the base model at $499, which is relatively priced to a good quality netbook seems a little high to me because of the “closed” Apple OS. Of course the price is always reflected to the the cost to build. So how much does it cost Apple to build an iPad and how much room do they have to lower the prices when the other tablets are released later this year.

I got this information from isuppli.com via businessweek magazine.

• Aluminum Case: $35.30
• Memory: $29.50 (16GB) $118 (64GB)
• Display: $80
• Processor: $17 – Apple builds their own processors. They acquired PA semi in 2008 so they could build low power consuming processros for mobile devices.
• Battery: $17.50 – Non-removable
• Wireless: $27.10 (GPS and 3G) $8.05 (WI-FI). Totals $35.05 for the 3G models. Data Plans run $30/month from AT&T

The total cost to Apple for the base model: $187.35.

Estimates for Apple will be a gross margin of 54% or $269.95 for each iPad sold. With an estimate of 3 -4 million units sold in 2010, Apple will generate over a billion in revenue from the iPad.The large margin also gives the iPad some room to lower the price if competition gets fierce, or if they want to add additional hardware like a camera.

Whether you think the iPad is a revolutionary product  or think it was a revolutionary hype machine, you have to agree that is a lot of money for Apple.

The iPhone was estimated to sell 10 million units in 2008, but ended up selling over double that in 2008, and over 42 millions by the end of 2009. Could the iPad do the same?