$500 iPad costs Apple less than $260 - iSuppli

When hot new gadgets hit store shelves, tech research firm iSuppli makes a habit of breaking them down and figuring out how much they cost to make. The latest in-demand piece of kit to be unceremoniously autopsied by the company is the just-launched iPad, which reaps Apple plenty of profit per unit sold, according to iSuppli estimates.

The firm took apart a 16GB iPad without 3G capabilities, a model that currently sells for $500, and estimated that the component parts for each unit cost Apple about $251. Throw in the cost of manufacturing, and the group says it costs Apple $260 to make each 16GB iPad. However, that number does not include other costs to Apple, including software, royalties, and licensing fees.

Looking a bit deeper into the numbers, iSuppli took particular note of how much money Apple devoted to the iPad's user interface instead of sheer horsepower.

"The iPad's design represents a new paradigm in terms of electronics cost structure and electronic content. Conventional notebook PCs are 'motherboard-centric,' with all the other functions in the system--such as the display, the keyboard and audio--peripheral to the central microprocessor and the main Printed Circuit Board (PCB) at the core. With the iPad, this is reversed. Everything is human-machine-interface-centric, with the PCB and integrated circuits all there to facilitate the display of content, as well as user inputs."

The results of iSuppli's teardown analysis are markedly different from the company's assessment of another piece of popular consumer electronics, the PlayStation 3. When Sony first launched its console in North America at $500 and $600 price points, iSuppli estimated that the company was losing hundreds of dollars on each system, hoping to make the loss up over time through its cut of software and accessory sales.

Technological advances and internal redesigns to the PS3 have brought that cost to Sony down significantly over the years. As of last year's launch of the PS3 Slim, iSuppli estimated that Sony's loss-per-system was down to $36.