Teardown: The iPad mini Costs Around $188 to Build

Teardown: The iPad mini Costs Around $188 to Build

IHS iSuppli did a teardown of Apple’s new iPad mini over the weekend, and have found that the 16GB Wi-Fi only model costs around $188 to build, which means the new device could be giving Apple a gross margin of around 43 percent.


By factoring Apple’s $188 bill of materials, or BOM, and manufacturing costs against the low-end 16GB Wi-Fi version’s $329 price tag, it can be concluded that the unit is netting the company 43 percent margins on the high end.

The teardown also found that the 32GB and 64GB models cost Apple an additional $31 and $62 respectively.

The flash memory in the teardown unit was determined to be from South Korean maker Hyniox, with Japan’s Elpida providing the system memory. Both components were formerly purchased form Samsung, however Apple appears to be continuing to work on relying less on its frenemy for components.

IHS iSuppli reports that the mini’s 7.9 inch display and corresponding components cost around $80, accounting for about 43% of the bill of materials. The panels are using GF2 technology, which raised per unit costs due to challenges experienced during manufacturing. The price should come down as production of the component normalizes.

The rest of the teardown shows the rest of the chips in the mini are from the usual lineup of suppliers, which include Cirrus Logic (audio silicon), STMicroelectronics (accelerometer), and a Murata-assembled wireless communications package containing chips made by Broadcom.

It’s important to mention that the above gross margin figures are before the costs of marketing, research and development, employee costs, storage, retail employees, shipping, etc. are added to Apples expenses, so they aren’t making a final profit anywhere near the 43% margin IHS estimates.

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