New iPad taken to bits, build costs revealed

Apple seems to be making less of a take advantage of each new iPad than it did when it launched the former model a year ago, in line with a research firm's analysis.

IHS iSuppli took apart a brand new iPad at the day the device went on sale within the US and nine other countries, and located that the components are costlier than those of the iPad 2.

The third iPad is available in several versions starting at US$499, an identical price because the iPad 2 at launch. New Zealand pricing of the device has yet to be announced.

Apple has priced all three generations of the tablet aggressively, making it hard for competitors to compare its features on the same price. It makes less from each iPad than from each iPhone.

As a complete, Apple is wildly profitable, earning US$33 billion in net income on $81 billion in revenue within the last calendar year.

ISuppli said a brand new iPad with 32 gigabytes of RAM and a cellular modem, which costs $729 in stores, costs $364.35 (NZ$441.43) to fabricate. That's 9 per cent greater than the $335 it cost to make the corresponding iPad 2 a year ago, when it came out.

The corresponding version of the 1st iPad cost about $276 to make in 2010, in line with iSuppli's estimate.

The better-resolution display and the bigger battery had to support it are the major reasons the hot iPad is dearer than the iPad 2. It has four times as many pixels because the iPad 2's screen. ISuppli estimates the display costs Apple $87, plus $40 for the touch-sensitive layer.

The brand new iPad battery has 70 per cent more capacity, however the new display consumes all that additional power, so the battery life is equal to for the old model.

Also contributing to the price increase is the hot cellular modem in some models. It is able to use faster "4G LTE" networks within the US and Canada.

Samsung remains the biggest single supplier of iPad components. It made the display within the unit iSuppli examined and it supplies all iPad processors. ISuppli suspects Samsung also made the battery and supplies flash storage memory for some versions of the brand new iPad.

The truth is, 1/2 the recent iPad's "bill of fabrics" could be for Samsung components, iSuppli said.

Apple and Samsung don't touch upon their business relationships.

Samsung also makes its own tablets and so they have succeeded better than most competitors.

ISuppli's cost estimate doesn't include packaging or overhead costs like design, marketing and software.

- AP