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iSuppli breaks down iPad cost, guess how much 3G costs



iPad001Normally I’m not that interested in hardware cost breakdowns. After all, there’s more to a device than the hardware, not to mention operational expenses. But iSuppli’s breakdown of the iPad holds particular interest to me.

First, on the low-end, iSuppli estimates the 16GB iPad costs $229.35 to build. On the high-end, the 64GB iPad with 3G costs $346.15 to build. That’s a wide margin between their respective $499 and $829 price tags, but not shockingly so since Apple’s real profit comes from selling hardware. It also reveals where that “nimbleness” in pricing could be found.

More interesting to me is that the cost of the additional components and installation in the 3G version adds up to $28.30, right at the $30 cost I supposed when wondering if the iPad’s 3G is reverse subsidized. So where’s the other $100 in the 3G price go? Pure profit or reverse subsidy for AT&T?

Via Gizmodo



  1. Joel

    02/10/2010 at 12:32 pm

    OK, a price breakdown for something they haven’t even touched. I’m sure their estimates are very accurate.

  2. Stuart

    02/10/2010 at 2:53 pm

    I wonder if the 3G chipset could easily be swapped out with one that supports T-Mobile 3G frequencies. Even if the antenna is not perfectly tuned it would enable easy T-Mobile use for 3G. Why should AT&T get a kickback when it the 3G is not restricted to them? I’m sure people will buy iPads and bring them for use in other countries. Even if that is the minority, why should they do AT&T any favors? The rest of the world is GSM so it won’t benefit one carrier or another if they have 3G modem. I think using the micro SIM instead of the standard SIM was enough of a give-back to AT&T so people can’t use existing subscriptions or phone sims in the iPad. $29.99 for unlimited internet is great except when you already have an expensive iPhone plan and perhaps also a netbook plan. It is more money to give AT&T when you should be able to swap SIMs and use a connection you already paid for.

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