$499 iPad costs $259.60 to build: iSuppli

iSuppli's done its traditional teardown of the latest hot electronic device. Based on that, iSuppli estimates that the lowest priced ($499) iPad, which has 16GB of storage and is wi-fi capable only, costs Apple $259.60 to build.

Interestingly, and showing the effect that globalization has on wages, iSuppli estimates that the manufacturing costs of the iPad are $9.

Much of the iPad's cost centers around the beautiful display of the unit. iSuppli states that $109.50 worth of components or about 44 percent of the total cost of the parts, are related to the iPad's UI. For example, the 9.7" diagonal glass display costs $65. Meanwhile, the battery is $21 and the memory of the device runs $30.

Andrew Rassweiler, director and principal analyst and teardown services manager for iSuppli said:

“While the iPad has the potential to change the game in the computing, wireless and consumer worlds, it already has changed the game of how many electronic products are—and will be– designed. The iPad’s design represents a new paradigm in terms of electronics cost structure and electronic content. Conventional notebook PCs are ‘motherboard-centric,’ with all the other functions in the system—such as the display, the keyboard and audio—peripheral to the central microprocessor and the main Printed Circuit Board (PCB) at the core. With the iPad, this is reversed. Everything is human-machine-interface-centric, with the PCB and Integrated Circuits (ICs) all there to facilitate the display of content as well as user inputs.”

In February, iSuppli issued a "virtual" teardown of the iPad, estimating a $219.35 BOM and $229.35 including the manufacturing cost. iSuppli said that higher costs for the display, battery, the UI chips and the power management ICs exceeded their original estimates, increasing the cost.