Analyst: Apple iPad mini costs $195 and up to build, may retail for $299 and higher

Analyst: Apple iPad mini costs $195 and up to build, may retail for $299 and higher
Next week, Apple is supposed to deliver on a product that was first rumored about two and a half years ago when the Apple iPad mini finally meets the public. We have heard so much about this device that it is hard to believe that it is almost here. One question that is open for discussion is the one concerning price. With Apple looking at the tablet as a way to challenge the low priced 7 inch Android models like the Amazon Kindle Fire HD and the 8GB Google Nexus 7 both priced at $199, where Apple decides to price the mini version of its tablet will be one of the most important decisions it makes this year (yes, even more important than deciding to put the earphone jack on the bottom of the Apple iPhone 5).

Breaking down the cost to produce the Apple iPad mini

Breaking down the cost to produce the Apple iPad mini

It has been said that at $199.99 for the Amazon Kindle Fire HD, Amazon breaks even on every tablet sold. That, of course, would indicate a build price of about $200 for the tablet and that would seem to line up with the experience of Ming-Chi Kuo of KGI Securities relating to Apple's BOM (Bill of Materials) for its smaller sized tablet. He did some detective work and found that the 16GB Wi-Fi version of Apple's mini tablet costs $195 to build while the top of the line 64GB 4G LTE version costs Apple $254.50. Kuo expects Apple to start the pricing for the smaller tablet at $299 and up. At that price point, the Cupertino based firm will produce gross profit margins of 53% to 135% which actually is gross as far as Apple stockholders are concerned. Consider that the Apple iPhone 5 generates gross margins of 213% to 257%. It must be partly the device itself as the gross margins on the third iteration of the Apple iPad weigh in at 58% to 103%. It is interesting that back in August, another analyst crunched the numbers and came up with the same $299 prediction for the price tag on the Apple iPad mini.

The Apple iPad mini's screen is the most expensive part of the tablet, costing $56.50 for each one. Adding Gorilla Glass 2 to each screen runs the tab up $7 per device. A new technology called GF DITO allows the device to be made 18% thinner than the full sized model. The actual numbers are 7.6 mm for the iPad mini and 9.3mm for the third generation of the iPad. The mini's logic board costs $54 for the Wi-Fi version and $80 for the 4G LTE model. The processor, which costs $15 each, is a 32nm process Apple A5X with 512MB of RAM. Some other interesting costs include the $16.50 5MP camera, $4 front-facing shooter, $33 casing, $12 battery and $7 labor costs.

Amazon breaks even on its tablet sales and profits from content, app and cloud space to  Amazon Kindle Fire owners. If Apple does price the iPad mini at $299 and up, will that $100 gap between the low priced 7 inch Android crowd and the Apple iPad mini be too much for even Apple to overcome? On the other hand, there are some who expect Apple to start the Pad mini as low as $249, a more reasonable price which would make it more competitive. We should know on Tuesday when two years of speculation comes to an end.

source: AppleInsider 

Related phones

iPad mini
  • Display 7.9" 1024 x 768 pixels
  • Camera 5 MP / 1.2 MP front
  • Processor Apple A5, Dual-core, 1000 MHz
  • Storage 64 GB
  • Battery 4440 mAh



1. Bozzor

Posts: 248; Member since: May 02, 2012

The cost breakdown does not include final unit logistics or marketing, but what it does do is give too high a cost for each of the components. Those are the unit prices that a 'normal' manufacturer would pay, not Apple, which is justifiably known for some of the toughest hardball negotiators out there. Easily, 5-15% off each component there to get a better idea of Apples true costs.

26. CellularNinja

Posts: 306; Member since: Sep 27, 2011

Whatever you think it's gonna be, just add about another $100 to that. Because Apple over prices everything. But unfortunately it's smart because they know people will buy it anyway.


Posts: 4851; Member since: Apr 13, 2012

Feel and quality and materials are better than all other's. But hugely let down by restricted OS, no Flash and low Ram, otherwise. Not a bad price.™®©


Posts: 2315; Member since: Jul 30, 2011

I don't care if they sell it for $9.99, I can get a better feel with a papaya! (and, I don't need iWiFi)! Bon Nuit Tous le monde.

16. TheDarkKnight

Posts: 88; Member since: Oct 12, 2012

Low ram? All i devices now have a gig of ram. Flash isn't there on android either and the OS is not that restricted.

21. kartik4u98

Posts: 511; Member since: May 19, 2012

How can you state that the OS isn't restricted?????

22. TheDarkKnight

Posts: 88; Member since: Oct 12, 2012

Closed source is not bad at all

23. kartik4u98

Posts: 511; Member since: May 19, 2012

Open-source is the future man..! aND BTW, i ASKED U THAT how can u say that iOs isn't restricted??

3. protozeloz

Posts: 5396; Member since: Sep 16, 2010

I have yo say 7" is a nice size, easy to handle light and easy to play games. Finally my nexus 7 arrived on the mail and I'm quite happy with its size, soft keyboard buttons are much easy to read plus it doesn't tire my hands so much when holding it for hours last light I spent around 3-4 hours reading on my bed without getting tired, something I couldn't do with the iPad so yeah 7" is really nice for me now :D

4. rusticguy

Posts: 2828; Member since: Aug 11, 2012

But isn't NEXUS going to cost less soon? 32 GB at price of 16GB.?

5. sarb009

Posts: 322; Member since: Jun 15, 2011

nexus 7 32gb for 250 that sounds much more better

6. FAW-Q

Posts: 63; Member since: Jul 29, 2011

I want to know what kind of crack these anal-lists are smoking. Would you really think Apple will sell a mini iPad for the same price as a iPod touch?

7. Berzerk000

Posts: 4275; Member since: Jun 26, 2011

I would rather take a 32 GB Nexus 7 for $250. Also, why would Apple make the iPad mini cost the same as an iPod Touch?

10. Nafiz

Posts: 13; Member since: Sep 12, 2012

I agree with you, even the network same wi-fi.. :) apple in my country just for rich people Hahahhaha.. *lolli.. lolli.. lolli..*

28. phones522

Posts: 94; Member since: Jan 27, 2010

That was the first thing I thought of it wouldn't cost the same it probably be $350-400

8. RaKithAPeiRiZ

Posts: 1488; Member since: Dec 29, 2011

How about no

9. prakesh

Posts: 92; Member since: Sep 13, 2012

same specs as the new ipad. except the size. the price is so cheap? goodbye the ipad:-)

11. marceldy

Posts: 18; Member since: Sep 21, 2012

IMO Apple will keep the same prices as iPad, use a marketing campaign " thinner smaller , can be used with one hand and east to carry " and keep their huge margin of profit, and iSheps will still buy it, while owning iPad iPod iPhone and loosing their iSoul.

13. dnyalexander

Posts: 10; Member since: Sep 03, 2012

apple will sell the ipad mini at $400 just to verifiy that millions of irobots will buy anything from apple at any price. irobots will stick they middle finger in their ass first and then they'll go to make a line just to show the world their stupidity doen't have limits.

18. CreeDiddy

Posts: 2125; Member since: Nov 04, 2011

It will be $299-$329.

14. CreeDiddy

Posts: 2125; Member since: Nov 04, 2011

No question the battle of the 7" tablet market has heated up since the Kindle Fire. Google has done a great job incorporating features of larger/more expensive tablets. However, this is where iPad Air will differ. Regardless of what you say the iPad Air will pack a 5MP camera along with an LTE chip. They have already moved ahead of the Kindle Fire and Nexus 7 within the portability challenge and accessing data in the public without requesting to connect to a wifi connection. Keep in mind, people love having the ease of connecting to a 3G/4G network in the open public. However, many people aren't educated to know that most smartphones have mobile hotspot. Although that is not an approach many buyers don't want to take for an internet connection in the public. I'm a huge proponent of simplicity. The Wifi version provides a lower cost alternative to the more expensive 4G model. Mobile Hotspot has become a great feature to have on a smartphone or tablet. Will the iPad Air succeed. You betcha! It will OUTSELL the Kindle Fire and Nexus 7 combined by 1st Quarter 2013. Combined the Fire and 7 sold 10 million. Speculators and analysts project 7-8 million by December. We are talking 2 months to sell that many units, in which took 3-5 months to sell that many for both units. Will I buy one. No, I prefer the 9.7" model, but it does look appealing. 1024x768, 5MP, LTE (option), A5X processor is plenty to sell over 10 million 1st Quarter of 2013.

15. rusticguy

Posts: 2828; Member since: Aug 11, 2012

Currently US tablet market share is at 52:48 in favour of Apple. Lets see which way this moves after all releases are over . :)

17. CreeDiddy

Posts: 2125; Member since: Nov 04, 2011

Unfortunately this number is skewed towards Android. It's almost like 30 to 1. 30 Android manufacturer tablets to 1 iPad device. Take out the junk tablets sold on HVC, etc...and let's stick to the big guns, such as Samsung, Moto, etc...Apple is way ahead and its not even close. However, due to Android being open source any manufacturer with a pulse that has a desire to program and distribute Android software along with their hardware they are classified as a positive statistic to Android market share. This is completely the wrong way to show Android market share.

19. Hemlocke unregistered

Not only that, but Amazon counts for only slightly more toward Android, as do the B&N offerings, than iOS does. Those forks are real, and they do not use the normal Android ecosystem. Jeff Bezos doesn't care one bit about Google or Android.

30. rusticguy

Posts: 2828; Member since: Aug 11, 2012

But that doesn't change the numbers still ... it's for these numbers that bApple is moving into territory which Jobs ridiculed few eyars back. So let numbers do the talking ... what you call JUNK is not so junk for people who use it. Yes it is JUNK whehn it comes to pricing for sure ... :)

20. JunkCreek

Posts: 407; Member since: Jul 13, 2012

well, apple tablet a.k.a iPad is the first of its kind, so no wonder it still hold biggest market share, while android tablet is still a little, but it would make its market shares if nothing happen (e.g sued by something, iThink). not haters, but from what already happen. the design patent is so biased, i remember old days when all vendor copied nokia design but nokia do nothing and people still looking for nokia in the first place and STILL PEOPLE NOT CONFUSED WHICH IS NOKIA AND WHICH IS NOT!

24. Planterz

Posts: 2120; Member since: Apr 30, 2012

163PPI? 163 pixels per square inch? That's disappointing as hell. Even 1024x768 7" tablets have higher PPI. I was considering the iPad Mini over a Nexus 7 until saw this. Now there's no effing way I'd buy an iPad Mini. The Nexus 7 with 32GB will be available for nearly $100 less than an 8GB Mini. Who in their right mind would even consider otherwise? Oh, right...iDiots would.

25. JunkCreek

Posts: 407; Member since: Jul 13, 2012

@Planterz Izzy dude, it is STILL JUST A RUMOUR. Take it izzy.

27. WakaFlakaD

Posts: 575; Member since: Apr 30, 2011

Does Apple need to lower their price to stay competitve? It's hard to try knock the king of the tablet down, even with the super-attractive price point/performance of the Nexus 7. $299 at least for sure

29. InspectorGadget80 unregistered

Apple not that cheap they will probably go as high as 399$ like all their expensive products

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