The Inquirer-Home

HP Touchpad costs $328 to make

A more reasonable mark-up than Apple
Thu Jul 07 2011, 13:10

ANALYST OUTFIT Isuppli has found that HP's 32GB Touchpad tablet costs $328 to make.

Isuppli tore down a Touchpad to find that the device's bill of materials (BOM) comes to $318, with a further $10 added for manufacturing costs. At a total of $132.50 the display and touchscreen parts make up the most expensive assembly, which is 41.7 per cent of the BOM.

Andrew Rassweiler, senior director of teardown services at Isuppli said, "The TouchPad in some ways does closely resemble the original iPad, with its use of the same LG display Apple used in the first-generation iPad, and by initially offering a product that only employs Wi-Fi as its exclusive wireless connection,"

The next most expensive part is the NAND flash memory, which makes up 14.1 per cent of the BOM, costing $45. The mechanical/electromechanical system is the next on the list at $30, 9.4 per cent of the BOM. The HP 32GB Touchpad sells for $599.

Apple slaps a $400 premium on its 32GB Ipad 2, which sells for $729, whereas HP's mark-up is a more moderate $271. Apple's $400 gross margin on the 32GB Ipad 2 includes a $130 premium for 3G technology. The gross margin for the 32GB Touchpad works out to 45.2 per cent, compared to Apple's 54.9 per cent mark-up on the 32GB Ipad 2.

The Ipad 2 does cost less to make than the Touchpad. When you take $19 off the $337 BOM for the 3G part to make it equivalent to the Touchpad, it is $10 less at $318.

Isuppli found that the BOM of the HP Touchpad with 16GB of storage is $306, compared to its retail price of $499. Including the $10 manufacturing cost, this works out to a mark-up of $193, a gross margin of 38.7 per cent.

Both versions of the HP Touchpad are due to tip up in the UK on 15 July running HP's WebOS operating system. For a closer look at the HP Touchpad tablet you can watch our video demo. µ


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