Money Apple spends to create an iPad2

Do you have a different perspective at looking at new gadgets?

Like, How much the device costed to the maker, and what additional money has been added to the device before thrusting it on the hands of the final buyer, that’s You.

If yes then, courtesy iSuppli, Here is the cost-profit dissection for the Apple’s hot device, the iPad2.

According to iSuppli, who specializes in keeping regular bill of materials estimates for Apple products, to create the 32GB GSM iPad 2, Apple has to spend $326.60. The CDMA version is pegged at $323.25. Apple is selling the 32 GB GSM iPad2 for $599. The added money to care of intermediaries, operators and itself is $272.4 .

Notably, creating iPad2 is costing Apple more than the iPad1 or the original iPad. According to iSuppli, Components for the touch display on the new iPad 2 are estimated to cost Apple $127 for each device, an increase of more than $30 from the first-generation iPad. The reason for the increase comes in large part from manufacturing challenges that the touch screen makers have been experiencing since beginning high production. Production yields, though they have been improving, has been very low throughout 2010, and drove prices to be much higher than initially expected.

That apart, the new A5 processor in the iPad 2 is also estimated to cost 75 percent more than the A4 processor found in the first-generation iPad. The A5 currently costs a presumed $14 per unit. The other factors contributing to the manufacturing cost of iPad2 are: the use of more expensive glue to improve efficiency and performance in the bonding of the touch display, a thinner glass cover believed to be Gorilla glass, and a more detailed inspection process requiring additional equipment for optical and panel examination.

For the sake of comparison, iSuppli estimates that the Motorola Xoom, with equivalent 3G radio and 32GB of memory, is serving Motorola a total bill of materials cost of $359.92. Motorola will sell this Xoom for $799. Added Money, $439.08 .

Interestingly, another cost estimates firm UBM TechInsights, had estimated a much lower manufacturing cost for iPad2, at $270 for the 32GB 3G-capable model.

As a sort disclaimer, Apple advises investors and enthusiasts not to put too much credence to these third-party reports. --------

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