Ipad Mini costs $188 to build!

Previously known as iSuppli, and widely known for its so-called “teardown” analysis reports, IHS has just completed its teardown report on the Apple’s newest iteration of the tablet. The verdict: The base model, a Wi-Fi-only 16 gigabyte iPad mini, which sells for a starting retail price of $329, costs about $188 to build. Adding additional memory — the options are 32GB and 64GB — adds only incremental cost but a fair amount of profit, amounting to an additional $90 for the 32GB version and $162 per unit on the 64GB model. (I revised this paragraph. See my note below.)

Aside from the cost of materials — known in industry lingo as a Bill of Materials (BOM) — the teardown also revealed the identities of several key suppliers on the latest device. The most visible component is the 7.9-inch touch-sensitive display.

LG Display and AU Optronics were found to have supplied the display components. Parts related to the display cost about $80, or about 43 percent of the total BOM. The screen uses a new technology known as GF2 that allows the overall display to be thinner than on previous generations. Andrew Rassweiler, an IHS analyst and head of the company’s teardown team, says that the new technology is proving somewhat problematic to manufacture, which is, for the moment, driving costs on the display up. But as kinks in the manufacturing process are worked out, those costs will come down.

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