NEW YORK (TheStreet) - iSuppli, a market research firm specializing in technology, has come out with a revised teardown analysis of Apple's iPad. It now estimates the bill of materials for the 16 GB Wifi iPad at $260 compared to its earlier estimate of $230. This implies that overall gross margins for the iPad may be lower than we had originally estimated and the consequence could be a 1% downside to the $267 Trefis price estimate for Apple's stock.
estimates that nearly 44% of the costs involved in the making of the iPad are related to its display, touch screen and other user-interface components.
We estimate that iPad's gross profit margin will be 55% for 2010 and will decline to 40% by the end of Trefis forecast period. However, the revised report implies that the iPad's gross profit margin for 2010 could be around 48%.
1% Downside to Apple's Stock if iPad Gross Profit Margin Declines to 48% in 2010
Although we forecast that the iPad's gross margin will be around 55% for 2010, there could be a downside of $2 (1%) to the $267 Trefis Price estimate for Apple's stock if iPad's gross profit margin declines to 48%, as suggested by the revised iSuppli report.
The potential impact of the lower gross margin is limited due to the small contribution of the iPad business to
stock. As shown in our analysis below, we estimate that the iPad business constitutes only 4% of estimate for Apple's stock.
For additional analysis and forecasts, here is
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