Leaves room for 40% margin
baby iPad is about to launch and analysts around the world are scratching their heads and looking into their crystal balls to see what sort of effect it will on the market.
It is widely believed that the mini could spell the end for the iPad 2 and that it could also eat into iPad 3 sales. But looking a bit more down to earth KGI Securities analysts Ming-Chi Kuo has come up with an estimate of the iPad mini’s bill-of-materials or BOM.
Of course, since the device is not out yet, the estimate is based on the cost of comparable components used in Apple gear, but the figures seem realistic. Kuo believes the entry level Wi-Fi only version with 16GB of storage will have a BOM cost of $195, while the 64GB version with LTE will come in at $254. Apple apparently plans to price the new iPad starting at $329, which leaves room for a 40.7 percent margin.
The $195 figure is pretty close to the Nexus 7 and Kindle Fire BOM estimates, but they sell with tight margins and they’re not meant to be cash cows for Google or Amazon.