iPad 2 News

iPad 2: Same Low Price, But The Components Cost Apple More

The iPad 2 might cost the same as the first-gen tablet… but several components used to make it have actually increased in price: most notably, the price of the iPad 2′s touch display and the cost of manufacturing its new, dual-core A5 SoC.
The biggest component cost increase is for the touch display, which shot up almost $32 in price to $127, compared to the first-gen iPad’s $95 touch display.
“The reason for the increase comes in large part from manufacturing challenges that the touch screen makers have been experiencing since beginning high production,” iSuppli’s report reads. “Production yields, though they have been improving, has been very low throughout 2010, and drove prices to be much higher than initially expected.”
That not only explains the iPad 2 touch panel’s high price, but low yields also explain why Apple had nowhere near as many iPad 2s as it needed to have this weekend to satisfy demand.
Prices also appear to have been increased by the new glue used to bond the glass to the touch display, as well as the new, thinner glass, believed to be Gorilla Glass.
As for the A5 SoC, because it is being produced in fairly limited numbers and because it is unique to the iPad 2 for right now, it costs 75% more than the A4 SoC found in the original iPad. However, that premium should erode quickly as Apple ramps up production, especially by the time the iPhone 5 rolls along.