The production cost of the iPad is about half the retail price, Bloomberg reported Wednesday citing analysis by Californian market researcher iSuppli. The total costs of parts used to build an iPad is estimated at US$259.60, including "a touch-screen display that costs $95 and a $26.80 processor designed by Apple and manufactured by Samsung Electronics," Bloomberg said.
The figure is about 52 percent of the cheapest 16-gigabyte model which is sold at US$499. iSuppli principal analyst Andrew Rassweiler told Bloomberg that much of the material costs were spent to make the design and the use of device more appealing to customers. "The screen's special design makes it about twice as expensive as those used in comparably sized netbook computers," he said. The cost analysis did not include "intangible items" such as software development, advertising, patent licensing or shipping.