Tech Industry

Apple may spend $200 to make each iPad Mini, says analyst

The entry-level iPad Mini could cost Apple close to $200 to manufacture, according to a KGI Securities analyst, which likely means lower profit margins compared with other iDevices.


The price of the iPad Mini to consumers remains a mystery, but one analyst believes that Apple spends around $200 apiece to make the entry-level model.

In a note to investors picked up by AppleInsider, KGI Securities analyst Ming-Chi Kuo estimated that the BOM (bill of materials) and manufacturing costs come to about $195 for the 16GB Wi-Fi model.

The priciest single part is the screen at $56.50. The logic board costs a fair amount -- $54 for the Wi-Fi version and $80 for the 4G LTE model, AppleInsider noted.

Of course, Kuo's component list is based on rough estimates and not any actual teardown of the device, so it may be off the mark. But assuming it's close to the actual cost, then Apple is unlikely to enjoy the same profit margins it grabs on other devices, especially the iPhone.

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The cost of the iPad Mini to consumers is still not pinned down.

The latest reports peg a price tag of $330 for the entry-level model. Prior reports have pointed to a price as low as $249, an estimate shared by J.P. Morgan analyst Mark Moskowitz.

Even assuming the higher price point, Apple would see profit margins somewhere between 35 percent and 58 percent on the new tablet, Kuo said. The current iPad brings in a profit margin of 37 percent to 51 percent, noted AppleInsider. The iPhone 5 kicks in margins of 68 percent to 72 percent.

Of course, carrier subsidies help Apple take home a huge profit margin on the iPhone. With devices like the iPad and iPod, Apple has no such subsidy, so its profit margins are naturally lower.

Much of this is just speculation right now. We should learn the consumer price for the iPad Mini once tomorrow's launch event gets off the ground. And upcoming teardowns of the new tablet will likely reveal the actual cost to Apple.

CNET will cover Apple's event tomorrow in a live blog.

(Via AppleInsider)