iPad mini teardown reveals 43 per cent gross profit margin for Apple

Ashleigh Allsopp
6 November, 2012
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A teardown of Apple’s new iPad mini by IHS iSuppli reveals that each 16GB WiFi only model of the 7.9in tablets costs roughly US$188 to build. This equates to a gross profit margin of approximately 43 per cent for Apple.

All Things D reports that the teardown analysis included the identities of several key suppliers of the iPad mini’s components, as well as the bill of materials (BOM). The report notes that its costs Apple an additional US$15.50 for the 32GB model, and US$62 for 64GB.

LG Display and AU Optronics were noted in the report as the suppliers of display components, which amount to about US$80, about 43 per cent of the total BOM. According to HIS analyst Andrew Rassweiler, new technology in the display is causing problems in the manufacturing process, and therefore leading to higher costs. These costs should decrease as these problems are ironed out, he said.

While Samsung continues to manufacture Apple’s A5 processor, Apple has chosen to purchase other components that Samsung previously supplied from different companies. For example, IHS says that Hynix Semiconductor, a chipmaker form South Korea, made the flash memory chips in the iPad mini. Japanese company Elpida supplied the system memory. The memory chips cost around US$15.50 per unit, says IHS.

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