Research firm puts $499 iPad cost at $259.60

Thu, 04/08/2010 - 8:05am
Andrew Vanacore, AP Business Writer

NEW YORK (AP) – The iPad may promise a computing revolution, but Apple's new gadget is also a pile of glass, metal and electronic innards – $259.60 worth, or about half the retail price, according to an independent estimate released Wednesday.

After taking the iPad apart and adding up the estimated costs of the components, the market research firm iSuppli said the low-end version of Apple's new gadget costs about $250.60 in parts. Manufacturing costs $9 more. Combined, that's 52 percent of the $499 price for that model.

That doesn't mean Apple's making a nearly 50 percent profit. There are development costs, marketing and other factors to take into account. Apple didn't immediately return a request for comment.

iSuppli's analysis does offer some sense of what you're paying for.

A lot of the cost, it turns out, is that sleek, user-friendly touchscreen. Each iPad contains an estimated $109.50 worth of components that provide the user interface, or about 44 percent of the total cost of the parts. For instance, just the glass display, which measures 9.7-inch diagonally, costs $65.

Second in cost in the low-end, 16-gigabyte version is the memory, which runs about $30. Then comes the battery for $21.

Apple began selling the iPad on Saturday starting at $499. Versions with more memory run $599 and $699, and the company plans to start selling models with cellular wireless capability later this month, starting at $629. The versions now out offer only Wi-Fi wireless connections.

On a different note, March metrics from Distimo, the app analytics company, confirm that content for the iPad costs a bit more than content for the iPhone. Distimo found that of the current 2,385 applications available exclusively for the iPad, 833 of those titles, or 35 percent, are games, followed by entertainment and education apps, with 260 and 205 titles, respectively.

Nevertheless, games and entertainment applications are more popular on the iPhone than on the iPad: 70 percent of the most popular applications on the iPhone are published in either one of those categories, compared with 40 percent on the iPad.

Fully 83 percent of applications on the iPad are paid, while only 73 percent of all applications are paid on the iPhone. The average price of all paid applications that are solely compatible with the iPad is $3.61, compared with $3.55 for applications compatible with iPhone.

The top downloaded paid app for the iPad was Apple's Pages, which features Word processing and office-related software. The top free download on the iPad is iBooks, Apple's proprietary answer to's Kindle Store.

Distimo found that education, health care and fitness, music, and sports applications are significantly more expensive, on average, on the iPad than on the iPhone. Books are currently cheaper on the iPad than on the iPhone, which may be influenced by the iBookstore availability on the iPad.

– Wireless Week’s Andrew Berg contributed to this report

More Broadband Direct 4/08/10:
•  Verizon serves up Comcast Network in Philly, other areas
•  DirecTV, Harmonic to demo 3-D at NAB
•  FCC extends deadline for net neutrality comments
•  Motorola rolls out ASI to GigE bridge for legacy video services
•  Cogeco bounces back to profitability in Q2
•  Reports: Redbox mulls streaming service
•  In the media: HP set to claim IC breakthrough
•  Hundreds apply for U.S. broadband grants
•  Masters offers peek at sports TV in 3-D
•  Apple iPhone to soon get long-sought multitasking
•  Research firm puts $499 iPad cost at $259.60
•  'Mind-reading' brain-scan software showcased in N.Y.



Share This Story

You may login with either your assigned username or your e-mail address.
The password field is case sensitive.