Monday, March 14, 2011

iPad 2 Production Cost: $330

According to a review by Tablet Dudes, it appears that the components to produce the iPad 2 is around $320. And when you add in manufacturing costs of $10, the iPad 2 runs $330. An interesting fact is that the A5 chip powering the iPad 2 is 75% more expensive than the A4 supplying the first generation iPad.

The overall bill-of-materials for the different iPad 2's are as follows:

The iPad 2 battery is slightly more expensive, likely due to being thinner yet with the same performance as the original iPad. The prices of the iPad 2 remained the same as the original iPad, leaving less margin in the price of the iPad to the production costs. Below is a table showing the margin build into the different iPad 2 models.

Here are a list of some of the key components and their prices:
  • Display/Touch Screen - $127
  • Memory 32GB model - $65
  • Enclosure - $35
  • Battery - $25
  • Baseband/RF/PA $18.70 for AT&T model, $16.35 for Verizon
  • Application Processor (A5) - $14
  • User Interface - $11.90 (Gyro, Accel, Compass, Ambient light)
  • Camera - $4.30
These prices do not include any of Apple's overhead (iOS 4.3 support, Apple Store Genius Bar, etc) or margin provided to AT&T or Verizon.

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