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

IHS iSuppli estimates that it costs Apple $188 to make each iPad mini

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 $188 (£117) 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 $15.50 for the 32GB model, and $62 for 64GB.

LG Display and AU Optronics were noted in the report as the suppliers of display components, which amount to about $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 $15.50 per unit, says IHS.

See also:

iPad mini vs iPad 4 benchmark tests iPad mini vs iPad 3: Display comparison iPad mini beats Nexus and iPad 3 in drop test iPad mini display: testing books, comics, movies and games VIDEO: UK iPad mini launch, lacklustre? iPad mini 'has same 32nm A5 processor as iPad 3, 5G iPod touch'

Tags lg displayiSuppliiPhonehardware systemstabletsIHSAU OptronicsiPadIHS iSuppliHynix SemiconductorAppleconsumer electronicssmartphones

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Ashleigh Allsopp

Macworld U.K.

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