Apple iPad profit model gets a 'teardown'

That memory-based pricing scheme has become standard practice for Apple when pricing its iPhone and iPod, for example.For the iPad, the 32GB model will bethe most profitable, costing only $29.50 more to produce than the 16GB versions, but the retail price gap is $100, iSuppli said. After the display, the NAND flash memory is expected to be the most expensive item. In the mid-range 3G model, the 32GB of NAND accounts for 21.4 percent of the total BOM, iSuppli said.The touch-screen display is estimated to be $80 for all models, making it the most expensive component in the system, accounting for 29 percent of the BOM of the mid-range 3G model, according to Vinita Jakhanwal, an iSuppli analyst.The display uses In-Plane Switching (IPS) technology which allows a wider viewing angle than conventional LCDs.The Apple A4 processor and DRAM are expected to carry a combined cost of $28.90, representing 10.5 percent of the mid-range 3G model's total BOM, making them the third most expensive line item in the mid-range iPad.The A4 alone is expected to carry a $17 cost."iSuppli believes the processor integrates an ARM RISC architecture microprocessor and a graphics processing unit. The part likely was designed by low-power processor specialist PA Semi," iSuppli said.Apple acquired PA Semi in 2008. iSuppli