In the fiercely competitive 7-inch tablet category, it's not unusual for companies to sell their slates at cost or even at a slight loss. The idea is to get the hardware into consumers' hands, and then flip a profit on content consumption sales, like ebooks, music downloads, apps, and so forth. A recent teardown analysis of the iPad mini
reveals that Apple
may be taking a different approach.
The folks at All Things D
got their hands on a teardown report by research firm IHS iSuppli, and according to the part-by-part analysis, the cost of components in the 16GB iPad mini model comes to $188. That's $141 less than the $329 retail price tag it carries, though it's important to note that the Bill of Materials (BOM) doesn't factor in labor charges, advertising costs, and things of that nature.
Regardless, it seems that Apple is profiting a fair amount on each iPad mini device it sells. The profit margin is even higher on the 32GB and 64GB models, as adding more memory only bumps up the component costs by a small amount. The cost of 16GB of memory is around $15.50, according to IHS iSuppli, so you can figure the memory costs around $31 for the 32GB model and $62 for the 64GB.
According to the teardown analysis, LG Display and AU Optronics are supplying Apple with display components for the iPad mini. Those parts add up to $80, or around 43 percent of the overall BOM.