See What an iPad Costs Apple

Parts cost are about half of retail

By Jackson West
|  Wednesday, Apr 7, 2010  |  Updated 2:15 PM PDT
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ABC/Modern Family

The costs also don't include marketing, though iPad appearances on Modern Family and by pitchman Stephen Colbert were probably free.

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Researchers from iSuppli report that the basic iPad, which retails for $499, has about $259.60 in hardware costs according to their analysis after carefully taking one apart.

That includes the cost of the expensive LCD touchscreen, the memory, and all the chips used to power the device's interface and processor.

And the more memory you buy, the better the margins for Apple, with the most expensive model costing $699 but containing only $348.10 in parts.

The ratio of cost to price is consistent with other consumer electronics products from Apple, including the iPhone.

And those margins are only bound to get better as Apple works to consolidate the chip set and memory prices fall.

What those costs don't include is labor, in the form of both design and manufacturing.

For instance, the researchers report that they believe the Apple A4 chip that powers the iPad processing was built by Samsung but designed by P.A. Semi, which Apple acquired in 2008 for $278 million.

And on the manufacturing side, workers at Apple supplier Foxconn, which assembles the devices, make only $55 a week and there has been a rash of suicides and attempted suicides on factory grounds in the last month.

Jackson West figures there won't be many iPads sold in Shenzen.

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