Rip it up and start again
Investment analysts are clamouring to know how much Apple has paid for its iPad 2's components and iSuppli's preliminary estimates are in.
iSuppli's teardown is the one most analysts are waiting for as it produces an estimated bill-of-cost for the components used in the new tablet, excluding the price of developing software, manufacturing plus extras like shipping, packaging and distribution, according to The WSJ's All Things Digital.
While Apple's critics will undoubtedly use the figures to moan about the tablet's pricetag, the City uses them to predict how much of a profit Apple will make over the next quarter or so by working out the gross profit margin of iPad 2 units, which Apple usually keeps hush-hush.
Although iSuppli is still beavering away at the teardown, it told the newspaper it estimates that the 32GB iPad 2 3G, which retails for $729, costs Apple $326.60 to make for the AT&T version and $323.35 for the Verizon Wireless version.
The reason for the difference in costs is apparently that some of the wireless chips in the model for AT&T are a little pricier or need an extra part or two. GPS is reportedly integrated with the Qualcomm wireless baseband chip in the Verizon model, but an extra GPS chip is needed to go with Broadcom's Wi-Fi and Bluetooth chips in the AT&T version, adding $1.50 to the bill.
The teardown reportedly reveals that Intel's Infineon provides the main wireless chip in the iPad 2 for AT&T with extra chips from Skyworks and TriQuint Semiconductor at $18.70. Meanwhile, it said that Qualcomm provides the main wireless chip for Verizon's iPad 2 with extra chips costing $16.35 coming from Skyworks, Murata and Avago Technologies.
The newspaper reported that other than the wireless chips, there is no difference in the hardware used for both US versions of the new tablet. They both apparently carry Apple's A5 chip made by Samsung for $14, but the priciest component is unsurprisingly the touch screen, which costs $127.
iSuppli reportedly discovered the display is made by LG but Apple is known to use other manufacturers too. The research firm apparently said the cost of the display is rising as manufacturing yields on LCDs have been lower. It also reckons that Apple is using a pricier glue to boost the efficiency of the process of bonding the thinner type of gorilla glass to the display.
The firm's teardown also reportedly found that Apple is using Samsung's NAND flash memory, for its sample at least as Toshiba is also known to provide Apple with flash. It also said that Elpida supplied the DRAM memory.
iSuppli is believed to estimate the cost of a Micron MCP memory chip, DRAM, flash and memory at $65.70.
Just like its predecessor, the iPad 2 sports a gyroscope and accelerometer made by STMicroelectronics and electronic compass from AKM Semiconductor.
However, iSuppli has not found out where the iPad 2's cameras have come from yet, although it suspects Aptina could be behind them.
Of course there are other teardowns and cost estimates available but investment analysts apparently favour iSuppli's.
The firm's estimates are however reportedly quite a bit higher than UBM Techinisghts. The WSJ reported that UBM's cost estimate was around $270 per iPad 2 unit before and after a teardown.
