Base iPad mini Includes $188 in Parts

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Apple 16GB WiFi iPad mini includes about US$188 in parts, according to an analysis from iSuppli. The research firm noted that the mini's display costs Apple about $80, or about 43 percent of the total Bill of Materials.

iSuppli said the 32GB WiFi iPad mini includes $219 in parts, and the 64GB version includes $250 in parts.

iSuppli: iPad mini packs in $188 in partsiSuppli: iPad mini packs in $188 in parts

While Samsung is manufacturing Apple's A5 processor, most of the iPad mini's remaining components come from other companies. LG Display and AU Optronics, for example, are supplying Apple with display components, according to AllThingsD. Hynix and Elpida are providing the memory for the tablet, which previously came from Samsung.

Apple has been reducing it reliance on Samsung for parts during their ongoing patent infringement battle. Both companies have accused the other of using patented technology and designs without authorization in courts around the world.

The 16GB WiFi iPad mini is priced at $329, which makes the company's profit margin look fairly significant. What the parts breakdown can't take into consideration, however, is the costs Apple incurs for research and development, manufacturing, packaging and shipping, all of which cut into profit margins.

The iPad mini went on sale on Friday, November 2. Apple reported total sales for the iPad mini and fourth generation iPad at 3 million units for the first three days of availability, which the company is calling a new record even though it's in line with the third generation iPad launch from earlier this year.

Comments

ilikeimac

I appreciate the way you worded the headline. I haven’t seen any other coverage of this news yet, but other outlets are likely going to write idiotic things like “Apple Makes $140 per iPad Mini” or “iPad Mini Costs Apple Only $188”, forgetting this point from near the end of this article:

What the parts breakdown can’t take into consideration, however, is the costs Apple incurs for research and development, manufacturing, packaging and shipping, all of which cut into profit margins.

gnasher729

“The 16GB WiFi iPad mini is priced at $329, which makes the company’s profit margin look fairly significant. “

Excuse me, do you seriously think there is significant profit margin on a product that takes $188 to build and sells for $329? Yes, I know there are people who think airlines ship iPads for free, Apple doesn’t pay any store rent, doesn’t pay for running a store, store employees work for free, nobody ever returns an iPad and non ever need replacing under warranty and so on, but if these numbers are right then there is 43% difference between build cost and retail price, which makes it very hard to get even 20% gross margin, and they are lucky to make any profit at all. I mean you _do_ know there is a difference between “cost to build” and “cost of sales”, and between “gross margin” and “profit”?

Either these numbers are wrong, or Apple seriously wants to hurt the competition.

ilikeimac

@gnasher729 Maybe you should read the rest of the paragraph after the sentence you quoted.

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