iPad BOM is $259.60, says iSuppli

El Segundo, Calif. — Based on the physical teardown of Apple’s iPad, the estimated bill-of-materials (BOM) cost of the low-end 16 Gbyte, non-3G iPad is $250.60, and when manufacturing expenses are added, the cost rises to $259.60, according to iSuppli Corp.

This is slightly higher than the market researcher’s initial estimate of $219.35 for the BOM and $229.35 with manufacturing costs added based on a virtual teardown.

iSuppli’s analysis indicates that with more than 40 percent of its BOM dedicated to the display, touch screen and other user interface components, the iPad design is a radical departure in electronic design compared to conventional products.

The combined costs of user-interface-related components in the iPad tallies $109.50, representing 43.7 percent of the total BOM for the 16Gbyte, non-3G version of the iPad.

“While the iPad has the potential to change the game in the computing, wireless and consumer worlds, it already has changed the game of how many electronic products are and will be designed,” said Andrew Rassweiler, director and principal analyst and teardown services manager for iSuppli, in a statement.

Rassweiler added: “The iPad’s design represents a new paradigm in terms of electronics cost structure and electronic content. Conventional notebook PCs are ‘motherboard-centric,’ with all the other functions in the system — such as the display, the keyboard and audio — peripheral to the central microprocessor and the main printed circuit board (PCB) at the core. With the iPad, this is reversed. 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.”

iSuppli notes that teardown costs account only for hardware and manufacturing and do not include other expenses such as software, royalties and licensing fees.


The teardown reveals that the most expensive component in the iPad is the display, priced at $65 and representing 25.9 percent of the product’s BOM. The display is a 9.7-inch diagonal, 262,000-color TFT-LCD with a resolution of 1024 x 768 pixels. It uses In-Plane Switching (IPS) technology, which supports a wider viewing angle and better picture quality in terms of presentation of color than a conventional LCD, said iSuppli.

The IPS TFT-LCD was supplied by LG Display. However, iSuppli believes Apple has qualified two other suppliers for the display, with more possible in the future.

The next most expensive component is the 9.7-inch touch-screen assembly, using capacitive technology, at a cost of $30, or 12 percent of the BOM. The supplier is Wintek.

The third most expensive part is the NAND-type flash memory at a cost of $29.50 for the low-end 16 Gbyte iPad. The NAND is supplied by Samsung Electronics Co. Ltd., but Apple is likely using other sources for these commodity parts, said iSuppli.

The fourth most expensive component is the battery, at $21, representing 8.4 percent of the total BOM. The 3.75-volt battery is a lithium polymer battery pack based on a value-added modular design that combines two cells into a single pack that is more easily replaceable than two individual cells wired in. The battery cells are supplied by Amperex Technology and the pack provided by Dynapack.

iSuppli said it did not expect to see the battery cells kitted as a pack, which suggests these batteries are meant to be replaced at some point.

Other design wins include an A4 processor core and graphics processing unit (GPU), designed by PA Semi and manufactured by Samsung at a cost of $19.50, a WLAN Bluetooth and frequency modulation module packed with chips from Broadcom at a cost of $8.05, a touch-screen microcontroller from Broadcom at $2.30, a power management chip from Dialog Semiconductor at $2.10 and a touch-screen driver IC from Texas Instruments at a cost of $1.80.

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