Since its inception in the late 1970s, Apple has led the technological market. Apple has come a long way from the ambitious start-up in a little garage in California to a $400 billion dollar technological giant that dominates the industry. Their products have been acclaimed by technological experts and helped them cement their place as the undisputed leaders of the industry. iPhones, Macbooks, and iPads are some of the most popular electronic gadgets available in the market.
The introduction of the iPad has completely revolutionised the computer industry and is highly popular among electronic gadget aficionados. This article will take a close look at the Apple iPad bill of materials and educate the readers on the most important details of the same.
What is the bill of materials?
Gadgets or electronic products usually have a bill of materials in them. A bill of materials is a bill or list of all the raw materials, parts, quantities, components, and sub and intermediate assemblies required to manufacture the product in question. It is also called a product structure or associated list and is abbreviated as BOM.
The BOM is obtained by teardown analysis, and a BOM also contains the prices of each individual component.
The BOM is an important part of any electronic gadget from the engineering point of view. It helps to gain valuable insight into the manufacture of the gadget and to determine the version of the gadget. The bill of materials also helps the user to get an insight into whether there have been any significant upgrades or price hikes in the device.
Given below is a picture of the bill of materials of the Apple iPad Mini 5 so that the readers can get a clear understanding about what a BOM is:
The Apple iPad : A gadget to behold
The Apple iPad was introduced more than a decade ago and has become hugely popular. More than 500 million units have been sold and newer, upgraded versions have been released every year, to huge success. The success of the Apple iPad has also led to the introduction of various other flagship products, such as the iPad Pro, iPad Air, and iPad Mini. All of them have been highly successful and added to the popularity of the iPad itself.
Like other gadgets, the Apple iPad also has a bill of materials. This list will help the user or an engineer gain valuable information about the components used in the manufacture of the iPad.
The essential bill of materials for the Apple iPad
The teardown analysis of the device obtains the bill of materials of the Apple iPad. The teardown analysis of the latest model of the Apple iPad throws light on the following:
The Apple iPad 3rd Generation has a flash memory of 32 gigabytes. It also has a 4G Long Term Evolution wireless capability. Looking at the bill of materials, the 16-gigabyte version of the Apple iPad 3rd generation has a BOM of around $347.55. Similarly, factoring in the manufacturing costs, which amount to $10.75, the 32 gigabytes version of the Apple iPad 3rd Generation has a BOM of $375.10. Going higher up, the 64 gigabytes version has a BOM of $397.95.
Thus, the Apple iPad 3rd Generation is significantly costlier in terms of BOM compared to the iPad 2nd Generation. Samsung products make up a huge portion of the total BOM of this iPad model. Most notably, the battery and display components were supplied by Samsung. This means that Samsung makes up for more than half of the total BOM of the device.
The retina display is also by Samsung. It is the single most expensive component in the BOM, at $87. Previously, the iPad 2nd generation used a $57 display. It had a screen resolution of 1024 by 768 pixels. This version has seen a major change, as it has a 2048 by 1536 pixels resolution.
This means that the resolution has been multiplied four times, and Apple has increased the cost by 53%.
The NAND flash memory is credited to Toshiba Corp. It is priced at $16.80, $33.60 and $67.20 for the 16, 32 and 64 gigabytes versions, respectively, for both the WiFi and the WiFi+4G models. It is known to be the component of the device that helps Apple make the highest amount of money. The intelligent pricing of the flash memory helps Apple make a higher profit margin.
Another component that is manufactured by Samsung is the A5X processor. It costs only $23. However, Apple has a big profit margin here. Apple itself is the designer of the processor, and Samsung is only the manufacturer. Thus, Apple profits from the manufacture of these processors as well.
The camera module has also seen a sharp rise in price as the previous price of $4.10 (for the 2nd generation) has now gone up to $12.35 for all variations of the 3rd generation model.
The pricing of the touchscreen remains exactly the same at $40. The main suppliers are Wintek, TPK and Chi Mei. They were also the suppliers for the previous version of the iPad. Another component that has remained almost the same in terms of pricing is the battery. In the previous version, the battery amounted to $27.75. The latest version, the 3rd generation version, is priced at $32.
Apple has also decided to give the battery of the iPad a major boost. In the previous version, the battery was 25 watts per hour. The newer model has seen a major upgrade as the lithium polymer battery is 42.5 watt-hours, seeing a rise of almost 75 per cent. However, unstable market prices have driven the new battery to cost only 40 per cent more than the older model. Thus, the battery of the new models is priced at $32, seeing a slight rise from $22.75.
One of the most crucial parts of the device, the wireless section, is priced at $41.50. This section is essential as it supports the Long Term Evolution of wireless capability. This section helps the 4G network capability to function properly, and this is a major upgrade from the previous model.
The previous model could only support the 3G air standard. The core LTE functionality can be credited to Qualcomm Inc. The MDM9600 baseband processor is a product of Qualcomm that has performed well consistently. In the 2nd generation model, the WiFi+3G had a wireless section cost of $25.60. For the Apple iPad 3rd generation Wifi+4G models, the cost has gone up to $41.5. Thus the wireless section accounts for more than 11% of the BOM.
Conclusion
So, there have been some significant improvements over the previous version of the iPad, and that really shows in the bill of materials as well. As a result, we have been seeing a steep rise in price for all versions of the Apple iPad.
For the 16 gigabyte version of the iPad 2nd generation, the retail pricing was $399. The BOM and the BOM+ manufacturing costs were $237 and $245, respectively. The retail pricing for the WiFi+3G version is $529, with the BOM and BOM+ manufacturing costs being $263 and $271, respectively. So, the profit margins were $145 and $258 for the two versions of the Apple iPad 2nd generation.
Now, coming to the Apple iPad bill of materials of the 3rd generation model, it is quite clear that the device has undergone some major upgrades. This has resulted in a rise in pricing, with individual components being costlier than before.
For the version with only WiFi, the 16-gigabyte model is priced at $499. The BOM and BOM+manufacturing costs are $306 and $316. Thus, the manufacturing cost has also increased by $2. The retail price for the 32-gigabyte model is $599, with the BOM and BOM+ manufacturing costs being $323 and $333. The retail price for the 64-gigabyte model is $699, and the BOM and BOM+ manufacturing costs are $356 and $366.
For the version that comes with WiFi as well as the LTE 4G technology, the price is even higher. The 16-gigabyte version is sold in the market at a price of $629, while the BOM and BOM+manufacturing are $348 and $358.
Similarly, the 32-gigabyte and 64-gigabyte versions sell in the market at $729 and $829, respectively. Their BOM and BOM+ manufacturing figures are $364, $375, $398, and $409, respectively. Thus, the profit margin has increased significantly, with the 64-gigabyte version profiting more than $300.
