$499 iPad Costs Apple About $229 In Direct Manufacturing Costs

In materials and manufacturing charges, the $499 iPad costs Apple about $229.35 to make, according to ISuppli, a market-research firm.

A look inside Apple Inc.'s new iPad points points to some familiar component suppliers. say they also found some new clues about the performance and durability of the long-awaited tablet-style computer.

iFixit Inc. and UBM TechInsights - firms that specialize in disassembling and analyzing electronic hardware - began taking iPads apart shortly after the product went on sale Saturday morning. Their research was aided by the unexpected disclosure on Friday of photographs of the iPad and its components from the Web site of the Federal Communications Commission, which reviews high-tech devices for potential electromagnetic interference with other products.

Apple, of Cupertino, Calif., built on technologies it used in the popular iPhone and iPod Touch in designing the iPad. One of the most prominent is Samsung Electronics Co., a major maker of semiconductors as well as consumer-electronics products. Apple has used the Korean company and Toshiba Corp. of Japan as its main suppliers of flash memory, chips frequently used to store data in portable devices. IFixit and UBM TechInsights said Samsung supplied the flash chips found in the iPad, one of the most costly parts of the system. Apple had used Samsung microprocessors—based on a design popularized by ARM Holdings PLC—to provide the primary calculating engines in the iPhone and iPod Touch.

For the iPad, Apple for the first time designed its own ARM-based chip, dubbed the A4. The A4 chip comes stacked with another variety of memory chips from Samsung—known as DRAM, for dynamic random-access memory—according to iFixit, which said it used X-ray photography of the chips' plastic packaging. The proximity of the chips suggests that Samsung also manufactured the A4 for Apple.

The DRAMs used in the iPad read and write data in 64-bit chunks, one potential reason why reviewers have called the iPad surprisingly fast. That helps it move a lot of data a lot faster. You are getting two to three times as many bits vs. other products.

Like Apple's MacBook Pro, much of the iPad is machined from a solid block of aluminum, which increases weight slightly but makes the device more rigid than many laptops Apple also used more epoxy to glue chips to circuit boards than in most other devices, adding to the iPad's durability. The iPad's battery is another reason for its 1.5- pound weight, which is less than conventional laptops but more than some e-readers like Amazon.com Inc.'s Kindle.

Some reviewers have praised the iPad battery for lasting longer on a charge than the 10 hours Apple claims. The device actually uses two batteries wired in parallel, giving the device 5.5 times the capacity of the battery in the iPhone. The battery supplier is Amperex Technology Ltd., a Hong Kong-based company that is a unit of Japan's TDK Corp.

In addition, Broadcom Corp. supplies chips that help manage the machine's touch screen as well as allowing it to communicate using Wi-Fi and BlueTooth technology. Texas Instruments Inc. supplies another chip associated with the touch screen. Cirrus Logic Inc. supplies a chip for managing audio in the device.

wsj, 4/5/10