Analyst: ‘iPad Mini’ May Cost $195 To Build; May Retail For $299 Or Higher

AppleInsider reports that according to KGI Securities analysts Ming-Chi Kuo, iPad mini’s bill of materials (BOM) cost will be in the range of $195 for the 16GB Wi-Fi model, to $254.50 for the top-of-the-line 64GB 4G LTE version.

It could be the reason why Apple’s smaller iPad will start at $299 or higher, instead of $249, which would have been a killer price.

Here are some interesting details from the estimated bill of materials cost for Apple’s yet-to-be-announced iPad mini:

  • The most expensive component will be iPad mini’s screen at $56.50, which includes the display, touch sensor, cover glass and other hardware. Kuo reports that Apple is likely to a new technology called GF DITO, or “GF2,” which will help Apple to make the device 18 percent thinner than the full-sized iPad.
  • The next most expensive component is the Logic Board, which will cost $54 for the Wi-Fi only model and $80 for the Wi-Fi + 4G LTE model.
  • The aluminum back casing is likely to cost $33.
  • Kuo expects Apple to use Qualcomm’s MDM9615M baseband chip that has also been used in iPhone 5. The baseband chip costs $24.
  • A variant of A5X system-on-chip that powers Apple’s new iPad but built using the 32-nm process could cost $15.
  • The 5-megapixel camera and battery could cost $16.5 and $12 respectively.
Based on this estimated BOM, Apple could make a profit margin of 35 percent to 58 percent on the smaller iPad, which would be on par with the profit margin on 37 percent to 51 percent it makes on the full-sized iPad. The smaller iPad would be a low profit margin product for Apple like the full-sized iPad, as it is estimated that Apple makes a huge profit margin of 68 to 72 percent on the iPhone 5.
We must also point out that Kuo’s BOM costs are for a 16GB iPad mini model, whereas the entry level iPad mini model is expected to come with 8GB storage, which should reduce the BOM costs. It is also expected that Apple will use components from the iPad 2 like the A5 chip based on the 32-nm process rather than iPad 3’s A5X chip, which may bring down the cost further.

Apple is widely expected to unveil iPad mini at the media event tomorrow, October 23.

[via AppleInsider]

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