Larger iPads put more money in Apple's pockets

2012 iPad hardware cost breakdown reveals that Apple charges a hefty premium for the 32GB and 64GB models.

iPad buyers who opt for the 32GB and 64GB models are paying a premium for all that space.

IHS iSuppli, a hardware research and market analysis firm, performed a cost breakdown of the components inside the 2012 iPad. According to their teardown, the 3rd generation iPad (Wi-Fi, 16GB) has a $306.05 bill of materials (BOM) and costs $10 to manufacture. Not surprisingly, the new iPad's Retina display is the most expensive component at $87. Other big-ticket items include the A5X SoC at $23, the Gorilla Glass touchscreen at $40, the iPad's 1GB of DRAM at $13.90, the cameras at $12.35, and the 43Whr Li-ion battery at $32.

Then there's the iPad's storage module. According to IHS iSuppli, the base-model iPad's 16GB of NAND Flash memory costs just $16.80. Each subsequent 16GB chunk of storage adds another $16.80 to the iPad's price tag. Therefore, the mid-level iPad's 32GB of storage costs $33.60 and the top-end model's 64GB costs $67.20.

Given that buyers pay an additional $100 for the 32GB iPad and $200 for the 64GB version, Apple makes a hefty profit on the 32GB and 64GB iPads' additional storage (see Table 1).