IHS Teardown: iPad Air 2 carries similar hardware price as iPad Air

According to a report by IHS Teardown, the new iPad Air 2 has nearly the same hardware price as the iPad Air. However the design and features of iPad Air 2 are bit different from its predecessor.

The 16GB Wi-Fi-only version of the Apple iPad Air 2 has a bill of materials (BOM) of $270. The cost rises to $275 when the $5 manufacturing cost is added.

Based on the finalized estimate from IHS in November 2013, the bill of materials of 16GB verion of the original iPad Air is $269, which is nearly similar to  iPad Air 2.

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The profit margin appears to be the same for Apple at the low end of the iPad Air 2 line, the product produces lower gross margins for Apple at the high end with 64GB and 128GB worth of NAND flash.

iPad Air 2 in India

This is due to the 64GB and 128GB models of iPad Air 2 are selling at the same price point as the original iPad Air 32GB and 64GB models. The additional cost of memory trims the estimated margins slightly.

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Key findings in the iPad Air 2 Teardown analysis are:

Immobile display

The resolution and diagonal size of the Air 2 display is same as the first Air model. The Air 2 also has 36 LED backlights to illuminate the display as the original Air.

For the Air 2, the display costs $77.00, while the touch screen comes in at $38.00. Based on pricing from November 2013, the original Air’s display amounted to $90.00, and the touch screen was $43.00.

A8 processor

Apple has upgraded the Air 2 compared to the original Air. The Air 2 sports a A8X processor compared to the A7X in the last-generation iPad Air.

The A8X, along with the M8 motion coprocessor—a separate integrated circuit—is estimated to cost a combined $22, up from $18 for the A7X and M7 coprocessor combination.

TSMC

Taiwan Semiconductor Manufacturing Co. (TSMC) now accounts for a share of processor production. Samsung previously held a monopoly on the manufacturing of older Apple processors, such as the A7 and A7X.

Now  the semiconductor manufacturing technology for the A8X also has advanced to 20 nanometers (nm), compared to 28nm employed in the A7 and A7X processors.

Battery

Apple has reduced the battery size for the iPad Air 2. It has a battery with a 27.6 watt/hour (Wh) capacity, down 16 percent from 32.9Wh in the original iPad Air, which in turn was down 23 percent from 42.5Wh in the third-generation iPad.

Slim design

The iPad Air 2 is 6.1 mm slimmer than the original iPad Air. This is due to the smaller battery pack and thinner display.

Double DRAM

The Air 2 uses twice as much DRAM as the iPhone 6 and 6 Plus, at 2GB, compared to 1GB in the most recent iPhones. This additional memory likely is required to support graphics on the larger-sized display.

Also, the Air 2 has a fingerprint sensor, unlike the first-generation Air. The two camera modules appear to be the same as in the iPhone 6, with resolutions of 8 megapixels (MP) and 1.2MP—without optical image stabilization. This is an upgrade from the previous 5MP and 1.2MP combination used in the previous-generation iPad Air.

 

Vishal Kawadkar

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