iPad Air Component Costs Estimated to Begin at $274, Roughly 13% Cheaper Than iPad 3

IHS Suppli has released its estimate of the component costs involved in building the new iPad Air, performing a virtual teardown based on information revealed by Apple and industry knowledge. According to IHS estimates, the component cost of the iPad Air is between $274 and $361 depending on the model, with the base model's components actually totaling $42 less than that of the entry-level third generation iPad last year despite significant technology improvements to reduce size and weight while improving performance. IHS iSuppli did not perform a cost analysis on the fourth-generation iPad, which was released in late 2012.

The estimates from IHS iSuppli cover only the cost of the various components that make up the device and do not include other costs involved in product development, manufacturing, and sales, such as research and development, software, patent licenses, marketing, and distribution expenditures. The full report has not yet been released but AllThingsD received early access.

ipadair_torndown
The bill of materials includes $90 for the display, $43 for the touchscreen components, $18 for the A7 chip manufactured by Samsung, between $9 and $60 for the Toshiba-made flash memory chips, $10 for the DRAM chips manufactured by Elpida, and $32 for the cellular data network chips made by Qualcomm for the LTE-ready versions of the iPad Air.

IHS analyst Andrew Rassweiler also points to the iPad Air's advances when it comes to supporting various LTE frequencies:

With the iPad Air, Apple appears to have reached a new milestone on the wireless front: It can support every LTE frequency with a single combination of chips. “This is something Apple tried to do with the iPhone 5S and 5C, but it couldn’t quite get there,” Rassweiler says. “One single model of the iPad Air is able to work with all US wireless carriers.”

IHS iSuppli reported last month that iPhone 5s component costs were estimated to begin at $199, with the cheaper iPhone 5c's costs estimated to be starting at $173. The iPad Air was released last Friday with adoption rates reportedly outpacing last year's iPad 4 and iPad mini launches, although Apple has yet to release official sales numbers for the device's opening weekend.

The full IHS Suppli report should be released tomorrow.

Related Roundup: iPad
Buyer's Guide: iPad (Neutral)
Related Forum: iPad

Top Rated Comments

macduke Avatar
98 months ago
It's pretty ridiculous that Apple still charges $500 for the 16GB base model. Should be at least 32GB.

I'm not surprised that the thing is cheaper. The 3rd gen was pushing the limits on what you could do at the time with a giant battery and brand-new display tech. The iPad Air has many of the same components: 5MP camera, same screen resolution, same amount of RAM, same storage capacities. It's probably a big reason why they could make the Retina Mini for $100 less. The Air helps subsidize it.
Score: 39 Votes (Like | Disagree)
bbeagle Avatar
98 months ago
Coca-Cola is just sugar, flavoring and water.

It costs about 5 cents in materials to make a 2-liter. They sell it for between $1 and $2.

That's a 1,000-2,000% markup. Where are the articles on this? :rolleyes:
Score: 26 Votes (Like | Disagree)
Lapidus Avatar
98 months ago
I guess that's excluded the costs of innovation & research etc. etc...
Score: 21 Votes (Like | Disagree)
HenryDJP Avatar
98 months ago
Then they should reduce the price by 13%.

In the end they would still earn more anyways!

Time for apple to show some good-will after everything they have put us through the last 24 months.

Oh yeah exactly, just like they are still charging for OS X and iWork, even for customers that have the previous versions of these. They never show any goodwill and give anything for free for customer appreciation. :rolleyes:
Score: 18 Votes (Like | Disagree)
appleguy123 Avatar
98 months ago
Apple could have doubled the space and still kept higher margins than last time.

16gb for $500 is ridiculous for 2013.
Score: 16 Votes (Like | Disagree)
HenryDJP Avatar
98 months ago
That's almost $300 without the labor of building it. My colleague in the first post thinks it's pretty ridiculous of Apple to charge so much for the 16GB but at already close to $300 without labor, R&D and advertising what do you expect Apple to do to make a profit? Would I love for it to be cheaper? Surely, but at the end of the day it's business and you don't have to buy, just remember that.
Score: 15 Votes (Like | Disagree)

Top Stories

apple watch ecg

Apple Watch Likely to Gain Blood Pressure, Blood Glucose, and Blood Alcohol Monitoring

Monday May 3, 2021 4:03 am PDT by
The Apple Watch may gain the ability to measure blood pressure, blood glucose, and blood alcohol levels, according to newly-revealed information about one of Apple's chosen business partners. Apple has been revealed to be the largest customer of the British electronics start-up Rockley Photonics, The Telegraph reports. Rockley Photonics has developed non-invasive optical sensors for...
tile sticker e1570533758981

Tile CEO: 'We Welcome Competition From Apple, But We Think It Needs to Be Fair'

Tuesday May 4, 2021 9:51 am PDT by
Just after Apple announced its AirTags, Tile CEO CJ Prober relayed his concerns about competing with Apple in the tracking space, and said that Tile would ask Congress to investigate Apple's business practices specific to Find My and item trackers. Prober this week did an interview with Bloomberg, where he further expanded on Tile's complaints about Apple and why he feels that Tile is...
facebook instargram updated att prompt 1

Facebook and Instagram Ask Users to Enable App Tracking in Order to Keep Services 'Free of Charge'

Sunday May 2, 2021 1:22 pm PDT by
As a way to convince users to enable tracking across other apps and websites, Facebook is deploying the tactic of telling users that they must enable tracking as part of the App Tracking Transparency framework in iOS 14.5 if they want to help keep Facebook and Instagram "free of charge." App Tracking Transparency or ATT is the newest privacy feature to come to iPhone and iPad devices as part ...
fortnite apple logo 2

Epic CEO Tim Sweeney Admits App Store's 30% Cut Is Similar to Consoles, Would Have Accepted Special Deal With Apple

Tuesday May 4, 2021 1:54 pm PDT by
Apple's legal battle with Epic Games is continuing on, and during the second day of the trial, Epic Games' CEO Tim Sweeney continued his testimony against Apple. Sweeney was grilled by Apple's lawyers, and made several points seemingly favorable to Apple. In addition to mentioning how he prefers Apple's iPhone and values Apple's privacy policies that he's aiming to dismantle, Sweeney...
Flat 2021 MacBook Pro Mockup Feature 1

Mini-LED Display Production Improving for Redesigned MacBook Pro Models Later This Year

Monday May 3, 2021 8:33 am PDT by
Apple supplier TSMT, a key vendor involved in the production of mini-LED displays in the newly announced 12.9-inch iPad Pro, has been able to address technical challenges for the production of mini-LED displays to be used in the upcoming 14 and 16-inch redesigned MacBook Pro models. As reported by DigiTimes, TSMT had initially been facing production constraints with the circuit board and...
signal instagram ads3

Signal Shares the Instagram Ads Facebook Doesn't Want You to See

Wednesday May 5, 2021 1:29 am PDT by
Encrypted messaging app Signal has had a series of Instagram ads blocked from the social media platform, after it attempted to show users how much data the Facebook-owned company collects about them and how it's used to push targeted ads. In a blog post, Signal described how it generated the ads to show users why they were seeing them, simply by declaring upfront the information that the...
Foldable iPhone 2023 Feature Yellow

Kuo: Apple to Launch 8-Inch Foldable iPhone in 2023

Sunday May 2, 2021 8:43 pm PDT by
Apple is working to launch a foldable iPhone with an 8-inch QHD+ flexible OLED display in 2023, Apple analyst Ming-Chi Kuo said today in a note to investors that was seen by MacRumors. Based on our latest industry survey, we forecast that Apple will likely launch a foldable iPhone with an 8-inch QHD+ flexible OLED display in 2023, with SDC as the exclusive display supplier and Samsung Foundry...
iOS 14 on iPhone feature emergency

Apple Releases iOS and iPadOS 14.5.1 With Fixes for App Tracking Transparency Bug, WebKit Security Issues

Monday May 3, 2021 10:04 am PDT by
Apple today released iOS and iPadOS 14.5.1, minor security updates that come just a week after the release of the iOS 14.5 update. There is also a companion watchOS 7.4.1 update for Apple Watch and an iOS 12.5.3 update for older iPhone and iPad devices that don't support Apple's latest operating system versions. According to Apple's release notes, the update fixes a bug with App Tracking...
airtags teardown tile mat galaxy smarttag

iFixit Shares AirTag Teardown Revealing 'Impressively Compact' Design Compared to Tile Mate and Galaxy SmartTag

Sunday May 2, 2021 4:54 am PDT by
iFixit has shared the first of its two-part series in tearing down Apple's AirTag item tracker, revealing that Apple had to make impressive design decisions to achieve its small design, including rethinking the speaker layout. For comparison, iFixit compared Apple's AirTag to the Tile Mate and the Samsung Galaxy SmartTag. Compared to the competition, AirTag is the smallest in size, with the...
maxresdefault

Hands-On With Brydge's 12.9-Inch iPad Pro Keyboard With Trackpad

Tuesday May 4, 2021 11:48 am PDT by
Brydge has been making keyboards for Apple's iPads for years now, and the newest model, the Brydge 12.9 MAX+, is compatible with the third, fourth, and fifth-generation iPad Pro models, so it works even with the new mini-LED iPad Pro. Subscribe to the MacRumors YouTube channel for more videos. In our latest YouTube video, we checked out the new Brydge 12.9 MAX+ to see if it's a viable...