According to a teardown by IHS, renowned estimator of how much companies actually pay for components, Apple’s iPad Mini carries a USD$188 (£118) cost of materials. You know how Google and Amazon are just barely breaking even on their tiny tablets? This is the opposite of that.
For some perspective, the 16GB Nexus 7 carries a USD$159.25 material cost and a USD$200 price tag. And Amazon has been very candid that it loses money on every Kindle Fire HD it sells. By contrast, there’s a USD$141 gap between the 16GB iPad mini’s asking price and its component value. Ka-ching!
It’s always been clear that Apple’s playing a different game from its tiny tablet competition; Google’s just desperately angling for a hardware foothold, while Amazon relies on content sales after the fact to make its initial losses worth it. Apple, meanwhile, wants to make money on hardware and software. Imagine! There’s nothing wrong with that of course, but reports like this only reinforce the notion that the iPad mini is heftily overpriced given its competitors.
There are also, of course, other factors that go into a device’s cost. Research and development, packaging, etc. But it’s not like Google and Amazon aren’t throwing great gobs of money in those directions either. And whether you love the iPad mini or hate it, at least now it’s clear that there are better bargains to be had elsewhere. [AllThingsD]