updated 06:21 am EST, Mon November 5, 2012
IHS iSuppli teardown, gross margins up to 56 percent on iPad mini
A new iPad mini teardown analysis by IHS iSuppli shows that Apple is making up to a 43 percent gross margin on each 16GB Wi-Fi iPad miniit sells, reports AllThingsD. The BOM (bill of materials) shows that the components in a 16GB iPad mini with Wi-Fi costs Apple at least $188 in costs. Additionally, Apple only pays an additional $15.50 parts for the 32GB model and $46.50 for the 64GB model providing Apple with a gross margin of 52 percent and 56 percent respectively for those models.
IHS Suppli also found that LG Display and AU Optronics supply the display components for the iPad mini, with these components presenting the largest single portion of the iPad mini's cost at around $80, or 43 percent of the cost of the $188 BOM. The display uses a new touch technology called GF2, which leads to a thinner display. However, as it is still cutting-edge technology, yield rates are said to be low and have forced the cost of the components up.
As was already known, Samsung continues to supply the A5 processor to Apple, which is manufactured in Samsung's new state of the art Austin, Texas plant. However, where Samsung also used to supply much of the memory componentary, Apple is now sourcing components from elsewhere. Flash memory is coming from Hynix Semiconductor, while the financially embattled Japanese firm Elpida is supplying the system RAM for the device at around $15 per chip.
While Apple is entitled to derive profit from the iPad mini, it is nontheless surprising just how much the company continues to (over) charge for the 32GB and 64GB models. Apple has been known to set and maintain prices for each iPad in its lineup as it seeks to preserve its operating margins. However, while the cost of flash memory has been dropping substantially over the past 12 months, it has yet to pass any of these savings on to customers.