iPad Mini: Build Cost Estimated To Start At $195

With just a day to go for the unveiling of the highly anticipated iPad mini, rumor mills are agog that the device component and manufacturing cost is likely to come up anywhere between $195 and $254 for various models.

It is widely believed that the Cupertino tech giant will sell the 7.85-inch “mini” version of iPad at lower-than usual margin rates, according to AppleInsider.

Apparently, the estimated bill of materials (BOM) and manufacturing costs of Apple's iPad mini will commence from $195 for 16GB Wi-Fi model to $254.50 for 64GB 4G LTE version, Ming-Chi Kuo, an analyst with KGI securities, stated in a research note.

In comparison to the iPhone 5 that clocks in huge margins of 68 to 72 percent, even the third generation iPad is considered a low profit margin product for Apple, securing 37 to 51 percent margin rate, AppleInsider has observed.

The iPad mini pricing structure is aimed at stalling competitors' attempts to win over substantial part of Apple's mobile device marketshare. The news gains credence as rival manufacturers take advantage of emerging market for 5-to-9-inch devices, a gap wherein Apple is yet to promote a product for sale.

Among the parts, iPad mini screen is considered to be the single most expensive component at $56.50 that encompasses display, touch sensor, cover glass and other hardware.

This apart, the assembly is employing a new technology called GF DITO or "GF2," that allows the device to be 18 percent thinner than 9.7-inch iPad.

The second most expensive part is considered to be the device's logic board that is estimated to cost $54 for Wi-Fi version and $80 for 4G LTE compatible model. With the tablet also employing Qualcomm's MDM9615M baseband chip like iPhone 5, it is expected to cost $24 an item.

Another component with slightly higher cost is the casing, which is pegged at $33, while the 5-megapixel rear facing camera is pegged at $16.50. The battery is pegged at $12 and labor costs come up to $7.

As for those who are curious about the chip configuration, well AppleInsider has it that the A5X SoC tweaked version employed in third-generation iPad is likely to be employed in the “mini” version as well though it is built using 32nm process accessing 512MB RAM, whereas the original A5X was built using Samsung's 45nm architecture leveraging 1GB physical memory.

TechCrunch has pointed out how unlike competition, Apple will not market a device where it is just breaking even or losing money. Apple, at present, is fully equipped to market a new device at a price point considerably lower than its existing iPad offerings and continue to enjoy margins at acceptable range. This seems to imply that the “mini” version of iPad may be priced higher than competitor device offerings.