Revealed: Apple iPad costs $260 to make

News 8 Apr, 2010

iSuppli says the iPad focus on user interface will change how computing products are developed.

The way the Apple iPad was put together will revolutionise how computing products are made, according to iSuppli, who claims the parts and manufacturing costs involved in creating the tablet device come to just $259.60.

The company took apart the 16GB version of the iPad, which retails for $499 in the US. On top of the $250.60 in parts, the tablet PC costs $9 to manufacture, iSuppli said.

iSuppli said more than 40 per cent of the entire "bill of materials" is in the display. The 9.7in display is the most expensive element in the tablet PC, with it's $65 price making up over a quarter of the iPad's total cost to manufacture. The touchscreen tech is the next most costly bit of the iPad at $30.

This dedication to the display and user interface parts "represents a radical departure in electronic design compared to conventional products," iSuppli claimed.

Andrew Rassweiler, principal analyst for iSuppli, said Apple had changed the game when it came to how products were designed. “The iPad’s design represents a new paradigm in terms of electronics cost structure and electronic content," he explained.

He said that notebook PCs are "motherboard-centric", with the interface aspects - like the keyboard or display - seen as less important than the microprocessor.

"With the iPad, this is reversed," he explained. "Everything is human-machine-interface-centric, with the PCB and Integrated Circuits (ICs) all there to facilitate the display of content as well as user inputs.”

The next most expensive iPad bits were the Flash memory - worth $29.50 in the 16GB edition - and the battery, priced at $21. "We had not expected to see the battery cells kitted as a pack, so such a design element clearly suggests these batteries are meant to be replaced at some point," iSuppli noted.

The cost is $30 more than the firm first predicted, as Apple spent more on the display, battery, UI chips and power management circuits than iSuppli expected.

Read on for more on the race to teardown an iPad.