iPad mini costs $329 to buy, but costs Apple only $188 to build

Summary:While Apple's pricing for the iPad mini starts at $329, the device itself only costs the Cupertino giant $188 to build. And the most storage you buy, the more profit Apple makes.

Each iPad mini costs Apple less than $200 to build, according to a teardown carried out by research firm IHS.

Apple's iPad mini starts off at $329 for 16GB of storage, but according to figures published by AllThingsD, the device has a bill of materials of only $188. The bill of materials only includes the parts, and not assembly costs, but as a rule assembly costs are usually only a few dollars.

Of the materials, the touchscreen itself is estimated to cost around $80. This, according to IHS analyst Andrew Rassweiler, is because the thinner screens are proving more difficult to manufacture. As manufacturing costs fall -- and fall they most certainly will -- Apple's profit margin for the device will grow.

Think you're paying too much for an iPad mini? Wait until you see how much Apple makes off higher storage capacity models.

Apple sells the iPad mini in 16GB, 32GB and 64GB models, and charges $100 per storage bump. However, the additional storage costs Apple very little. In fact, the jump between 16GB and 32GB costs about $15, while the bump between 32GB and 64GB costs about $45.

Storage is quite cheap, yet Apple -- along with the likes of Google and Amazon -- charges a premium for customers wanting more storage. Charging extra for storage also means that companies are not so eager to make it easy to add storage to devices using micro-SD cards and the like. Neither the iPad, the iPad mini, Amazon's Kindle Fire HD, nor Google's Nexus 7 have the capability to take a storage card, which forces users to either buy the higher capacity devices at a premium, or add storage using an external Wi-Fi storage device.

In comparison, IHS estimates that Microsoft's Surface tablet, which retails for $499 for 32GB, has a bill or materials of $271, while Amazon's Kindle Fire HD tablet, which retails for $199, costs just $165 to build.

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Topics: iPad, Apple, Hardware, iOS, Tablets

About

Adrian Kingsley-Hughes is an internationally published technology author who has devoted over a decade to helping users get the most from technology -- whether that be by learning to program, building a PC from a pile of parts, or helping them get the most from their new MP3 player or digital camera.Adrian has authored/co-authored technic... Full Bio

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