Apple looking to cut costs on iPad 3 as it preps for another flood of tablets

If you think Apple's position in the tablet market is secure enough that the Cupertino-based company doesn't worry about price competition, you'd be wrong. Right on the heels of a report about Amazon.com and other OEMs looking to reduce cost with two-finger multi-touch touchscreens comes a new report about Apple seeking to lower its iPad 3 costs.

According to the report, also from DigiTimes, which sources its info from upstream component suppliers, Apple is now "more willing" to use modules from Taiwan-based integrated circuit (IC) design houses as a way of reducing iPad’s cost.

The sources said that Apple is doing so in order to adjust "the cost structure for iPad tablets in order to compete with an array of tablet PCs to be launched by rivals in the second half of 2011."

There's no doubt there is a flood of Android tablets coming for the holiday season. Although Apple still holds the lion's share of the tablet market, the flood of Android tablets has begun making inroads.

What's unclear is if Apple will release an iPad 3 later this year, although rumors have a new version of the iPad shipping around the same time as the iPhone 4S / 5. The new model has been variously dubbed the iPad 3, iPad 2 Plus or iPad 2 HD.

Earlier, iSuppli tore down the iPad 2 and estimated that its bill of materials (BOM) cost was $323.25 for the 32GB CDMA version and $326.60 for the GSM version), a significant increase compared to the original iPad (approximately $320.00 for the 32GB 3G original iPad).

Most of that change in cost was attributed to costs associated with the iPad 2's new A5 processor, the added cameras and high demand that caught touch screen panel makers by surprise.