iPad Mini Component Costs Estimated to Begin at $188

AllThingsD reports on an iPad mini teardown from research firm IHS iSuppli estimating the component costs for Apple's new iPad mini at $188 for the 16 GB model.

The base model, a Wi-Fi-only 16 gigabyte iPad mini, which sells for a starting retail price of $329, costs about $188 to build. Adding additional memory — the options are 32GB and 64GB — adds only incremental cost but a fair amount of profit, amounting to an additional $90 for the 32GB version and $162 per unit on the 64GB model.

The report notes that approximately 43% of the device cost is related to the display, which adopts an expensive new process known as GF2 to reduce the part's thickness, although costs are expected to come down as the production process is refined.

ipad mini exploded view
The bill of materials estimate provides support for Apple CEO Tim Cook's claim that the iPad mini has been priced aggressively with a profit margin significantly below the company's average. While the entry-level iPad mini is priced at $329 for a product that costs Apple $199 to build, the iPhone 5 costs Apple just $10 more to build but sells for $649. The iPad mini is, however, more in line with the full-size iPad, which IHS iSuppli estimated to carry a bill of materials of $306 for the entry-level third-generation model at its launch earlier this year.

Related Roundup: iPad mini
Buyer's Guide: iPad Mini (Don't Buy)
Related Forum: iPad

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Top Rated Comments

notjustjay Avatar
151 months ago
Before everyone starts crying "So why isn't Apple selling it for $199?" remember that these are prices for the components only and do not cover costs such as research, engineering, testing, labour, warehousing, etc, etc, etc.
Score: 22 Votes (Like | Disagree)
RawBert Avatar
151 months ago
It's a bargain at $329.
Score: 18 Votes (Like | Disagree)
bpcookson Avatar
151 months ago
If it had a retina display, I'd pay $400 for baseline.
For now, no sale.

edit: Yes, I went and held it. Hogged one at the Apple store for a good 10 minutes.
Score: 17 Votes (Like | Disagree)
kirk26 Avatar
151 months ago
It's a bargain at $329.

Or a rip-off.
Score: 14 Votes (Like | Disagree)
TimUSCA Avatar
151 months ago
Anyone who is freaking out about not having a retina display has likely not even held an iPad mini in person. The screen is actually pretty good. No, it isn't retina, but it's certainly better than the iPad 2 screen, which really wasn't bad either.

After using my mini through the weekend, I'm in love. It's fast, looks nice, and is perfect to hold. There's really nothing to hate about it, and the price is good. Is it $200? No. But Apple isn't in the business of selling your information to advertisers, so they actually have a profit to make. And if you've ever used a $200 tablet, you'd see why they're $200. You get what you pay for. And in this case, you pay a little extra for something that isn't laggy as hell with a severely limited app store.
Score: 11 Votes (Like | Disagree)
crankmotion Avatar
151 months ago
329,- is a strange price

I'm sure Steve would have priced it 299,-. Just for the shock-and-awe feeling and a more attractive communication.
Score: 11 Votes (Like | Disagree)