Shock! Apple over-inflates iPad price tag

Posted by Aharon Etengoff

The components powering Apple's overhyped iPad tablet reportedly cost Club Cupertino as little as $219.35.

According to iSuppli, the components include an LG touch-screen display with an $80 price tag, along with a $17 processor designed by Apple and manufactured by Samsung.

Shock! Apple over-inflates iPad price tag "Even the lowest-priced iPad, with 16 gigabytes of memory and a retail price of $499, may be beyond the reach of budget-conscious consumers, some analysts have said," opined Bloomberg's Arik Hesseldahl.

However, ISuppli analyst Francis Sideco claims the "relatively low price" of the iPad's materials may allow Apple to reduce the retail price over time.

"There's certainly a decent amount of headroom in there," said Sideco. "If they had to reduce the retail price, they certainly could."

Sideco explained that the most profitable of the six iPads is the 32-GB version with 3G network access, as its combined materials and manufacturing cost of $287.15 amounts to just 39 percent of the retail price. 



Meanwhile, the least profitable is the 16-GB non-3G version, which carries a whopping $499 price tag. 

Its combined costs gobble up $229.35, or 46 percent of the retail price.

Finally, Sideco estimated the price of 16 GB of flash memory at $29.50, with 32 GB pegged at $59 and 64 GB at $118.