iSuppli: Apple iPad parts cost $220

Research group iSuppli is reporting that the iPad hardware components cost Apple between $220 and $335, which leaves room for a possible price cut after it launches next month.

The iSuppli report shows a full breakdown of every part in the iPad; a $17 processor and an $80 touch-screen display are used.  The iPad will ship with three different storage capacities (16GB, 32GB, or 64GB drives) and Apple pays $29, $59, and $118 for them respectively.

The 32GB iPad model with 3G support will earn Apple $100 more than the 16GB model, but only costs $30 more to manufacture.



There has been speculation Apple would have to cut the price if consumer demand isn’t at a high enough level — and a recent Retrevo survey indicates less than half of consumers have interest in buying an iPad. Apple executives have stated that they will remain “nimble” on iPad pricing.

The base $499 model includes 16GB of storage, but it still might be too expensive for consumers during a down economy. 

A high price tag, low consumer demand due to early criticism, and increased competition from Sony, Asus and others could lead to future problems for Apple.  To be fair, the component cost numbers listed earlier don’t take labor, advertising and other costs into consideration.

Even so, Apple still could lower the price but increase the number of accessories it offers to consumers, competing with third-party products available from Be.ez, Scosche, iLuv and other popular consumer product companies. But even if Apple doesn’t make much money on the iPad sales themselves, they’re sure to rake in the dough on app sales, music sales and e-book sales, as the company gets a hefty cut on all of these products.