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Galaxy Tab costs less to make than iPad, priced the same

updated 07:45 pm EDT, Mon November 1, 2010

iSupply finds Galaxy Tab overpriced versus iPad

Samsung may be charging a premium on the Galaxy Tab despite it actually costing less to make than an iPad, iSuppli estimated today in a cost breakdown. Although the Galaxy Tab is within $30 of a 3G iPad in stores, it only costs about $205.22 in raw parts where Apple's larger 16GB tablet costs $59 more to produce. Analysts indirectly accused Samsung of making an upsized Galaxy S phone but charging a tablet premium.

"Instead of matching up with the iPad on a feature-by-feature basis, the Galaxy Tab really is larger version of Samsung's Galaxy S smart phone," principal analyst Andrew Rassweiler said. "While the design approach makes the Galaxy less expensive to produce than the iPad 3G, it also makes for a product that lacks the same usability. The Galaxy Tab's screen resolution, size and technology are not at the same level as the iPad. This is a critical difference, given the fact that the display is a key differentiating factor for the iPad."

Most of the cost savings came from the seven-inch screen, where the lower color accuracy, resolution and size brought the cost down to about $57. When new, the iPad's LG Display-made IPS panel and touchscreen cost about $95. Apple has billed the screen as an essential ingredient as it helps show photos and videos in full quality and renders the screen easier to read through wide viewing angles.

Flash memory is the next most expensive component. iSuppli estimates that it costs $51 for the combination of 16GB of main flash memory, unusually from SanDisk and not Samsung, with the 1.75GB of separate memory to hold the firmware and other core content. Samsung's 1GHz Hummingbird processor is actually one of the less expensive parts at $8.84, while the cameras, often used to justify the relatively close pricing with the iPad, cost just $7.95 combined.

Other notable parts include the raw shell and connectors ($15.22), touchscreen and gyroscope controllers ($13.87), Samsung battery ($10.60) and Infineon 3G chipset ($10.07). iSuppli also factors in short-range wireless from Broadcom ($8.96) as well as the necessary power and in-the-box materials.

It's uncertain how much actual profit Samsung generates from the Galaxy Tab. The estimates haven't included marketing, research or other factors that could possibly lead to tighter margins. However, the wide gap between the tablet and the iPad has suggested that Samsung has either had high development costs or has been willing to pad the price. Apple has repeatedly stated that it's willing to be aggressive on iPad sales and keep margins low, in part to head off competition from Android devices like the Galaxy Tab that might try to undercut Apple on price.













By Electronista Staff
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Comments

  1. SockRolid

    Forum Regular

    Joined: Jan 2010

    +2

    Samsung can have the 7" pad market.

    Apple doesn't need to build a 7" iPad. They already have a mini iPad: the iPod touch. And a 7" screen is just precisely the wrong size. Too small to touch-type on, too big to thumb-type on.

    The real question is whether Apple will ever make an iPad bigger than 9.7." I think it's possible that Apple could make a 12" iPad, but much bigger than that and there's too much hand motion. The touch targets will become too far apart.

  1. azrich

    Fresh-Faced Recruit

    Joined: Apr 2010

    +2

    Size does matter

    I wouldn't mind a tablet that was the same size as an 8.5x11" piece of paper. But then I'm thinking of documents and lord knows it's capable of so much more.

    Also, I wouldn't mind having touch on the bezel for scrolling and zooming. When I'm using Numbers I very often select objects accidentally instead of scrolling or zooming the screen.

    Rich

  1. iphonerulez

    Fresh-Faced Recruit

    Joined: Nov 2008

    +1

    The fruit haters say the iPad is too big

    and heavy to carry and they want something like a Kindle. Don't ask me why, but those fAndroids over at Engadget say 7" is the perfect size and weight for a tablet. The only reason I disagree is because I think that users always start drifting towards larger displays if given the option. I distinctly remember the first netbooks with 7" screens and users were saying how tiny they were and were always wishing they'd bump the screen size up. Today, those display have grown to 10" and 11" so I would tend to think Apple has already decided that 9.7 is at least where netbooks are today. So except for trying to stuff a 7" tablet in your pocket, I don't see the point of going back to 7" displays. I'm talking about consumers in general and not necessarily the tech-heads who have specific desires.

    I could live with a 7" display as a compromise. I do think that Steve hit the nail on the head when he said that eventually tablet makers are going to have to increase the display size because I believe that's what the general consumer wants.

    Would Apple move to a larger display on the iPad? I don't know. What you say about hand motion is likely true. However, there could be some niche need for a tablet that size for health organizations (X-rays, MRI photos) or for construction (blueprints and CAD drawings). I don't see myself carrying a lunch tray around but that's just me.

    It's amusing that the tech-heads are always saying that Apple stuff is always overpriced and the quality isn't all that great. Now Samsung is charging even more for a smaller display, cheaper display and less memory. I guess the Droidtards aren't going to have much to say now. Well, at least all that plastic makes the Tab lighter to hold which the fAndroids are happy with. On the whole, I don't think that Apple will have to worry about a mass defection to Android tablets. I do know that there are people still looking for Flash support so I guess those will have to run to some Android tablet or RIM's PlayBook.

  1. chirpy22

    Junior Member

    Joined: Jan 2006

    +5

    What?!?

    Nobody is commenting about how Apple is charging a premium so far above their competitors and their products are not worth it? I am shocked!

    Anyway, I wish they would put solar cells along the bezel strip on the iPad. And while their at it, some on the iPhone would be cool, too. There is plenty of room for them.

  1. Eriamjh

    Addicted to MacNN

    Joined: Oct 2001

    +3

    Apple says the world doesn't want a 7" tablet...

    ...that is, until they make one.

    I don't think 7" is ideal, but Apple could have easily made 7" clone of it's current ipad in prototype and tested them with the current IOS. If it was better, they probably know.

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