Apple considering cheaper components to keep iPad 3 competitive

iPad 2 WiFi teardown image courtesy of iFixit

An interesting report comes this morning via DigiTimes, the Taiwanese trade publication. Besides naming possible integrated circuit suppliers for iPad 4  – Novatek Microelectronics (LCD driver), Richtek Technology (integrated power management), Capella Microsystems (ambient light sensors) and Integrated Memory Logic (programmable gamma/Vcom buffer solutions) – the publication mentions that Apple is now “more willing” to ship various integrated circuit modules from Taiwan-based IC design houses as a way of reducing iPad’s bill of material (BOM):

Apple is now more willing to adopt IC solutions from Taiwan-based IC design houses as it is adjusting the cost structure for iPad tablets in order to compete with an array of tablet PCs to be launched by rivals in the second half of 2011, commented the sources.

iSuppli estimated iPad 2’s bill of materials at $323.25 for the 32GB CDMA version ($3.35 more for the GSM version), an increase compared to the original iPad which is mostly attributed to the costs associated with Apple’s A5 processor, cameras and high demand that caught touch screen panel makers on the wrong foot. For example, iSuppli estimates that Apple pays an estimated $127 for touch screen panel per each unit versus an estimated $95 for the original iPad’s touch screen panel. However, economies of scale enable Apple to grow iPad 2’s margins, one analyst estimates, and actually extract more profit from the second-generation unit.