Apple iPad Air 2 teardown shows minimal increase in BoM costs
The 16-gigabyte (GB) Wi-Fi-only version of the Apple iPad Air 2 sports a bill of materials (BOM) of $270, based on a preliminary estimate. When the $5 manufacturing cost is added, the cost rises to $275.
This compares to the $269 BOM for the 16 GB version of the original Apple iPad Air, based on a finalised estimate from IHS in November 2013.
Although 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 64 GB and 128 GB worth of NAND flash. This is because the 64 GB and 128 GB models of iPad Air 2 are selling at the same price point as the original iPad Air 32 GB and 64 GB models. The additional cost of memory trims the estimated margins slightly.
“The Air 2 delivers a series of refinements compared to the original Air but features nothing earthshaking,” said Andrew Rassweiler, senior director, cost benchmarking services for IHS. “With largely identical display specifications and minor improvements in most other areas, Apple continues to offer evolutionary upgrades to the iPad lineup. It’s interesting to note that by offering the consumer a 128 GB model for the same price as last year’s 64 GB iPad Air, Apple actually has taken down our estimated margins a bit on both the 64 GB and 128 GB models. The increased memory configurations to 64 GB and 128 GB are some of the key upgrades here.”
The table presents IHS’ preliminary BOM and manufacturing cost estimate of the iPad Air 2, based on a physical teardown of the tablet. Note – says the analysts – that the teardown assessment is preliminary in nature, accounts only for hardware and manufacturing costs, and does not include other expenses such as software, licensing, royalties or other expenditures.
Immobile display
The resolution and diagonal size of the Air 2 display has not changed from the first Air model. The Air 2 also has the same number of light-emitting diode (LED) backlights to illuminate the display as the original Air, at a count of 36.
Because pricing for electronics decreases over time, and due to the fact that there has not been a major upgrade to the display specifications, the display panel and touch screen are less expensive than they were when the original Air was introduced one year ago.
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.
Eight is enough
One area where Apple significantly upgraded the Air 2 compared to the Air is the processor. The Air 2 employs the Apple-designed A8X processor, compared to the iPad Air-specific variant of the A7 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 iPad Air-specific variant of the A7 and M7 coprocessor combination.
The A8X employs a different integrated circuit (IC) package that has no package-on-package memory, and also features a metal cap on the IC that acts as a heat sink. The A8X likely carries a larger processor burden than the A8. This is because of the A8X’s faster clock speed and the iPad Air 2’s larger screen, which put increased graphics processing load on the iPad processor vs. that of the iPhone.
As a result, the A8X, like the iPad Air-specific variant of the A7 before it, likely runs a bit warmer than the A8, requiring the heat sink to help keep the central processing unit (CPU) cool.
Also, the larger size of iPad Air 2 chassis compared to the iPhone 6 and 6 Plus models gives Apple more space inside to lay out the printed circuit boards, eliminating the need to conserve space by placing the dynamic random access memory (DRAM) directly on top of the processor.
TSMC gets business from Air2
The big story with the A8 and A8X processors is that 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.
With the addition of TSMC, the semiconductor manufacturing technology for the A8X also has advanced to 20 nm, compared to 28 nm employed in the A7 and A7X processors. This more advanced semiconductor process improves energy efficiency for the A8 and A8X processors.
Battery shrink
For the Air 2, Apple once again has reduced the battery size and capacity, while maintaining a similar usage lifetime. The iPad Air 2 has a battery with a 27.6 Watt-hour (Wh) capacity, down 16% from 32.9 Wh in the original iPad Air, which in turn was down 23% from 42.5Wh in the third-generation iPad.
Apple manages to maintain battery life while reducing battery capacity by improving efficiency throughout the design, including improvements in the display and by employing more advanced process chips, such as the A8X produced in a more advanced semiconductor process.
Slimming down
The Air 2 is thinner than the original iPad Air at just 6.1 mm. The smaller battery pack and thinner display help contribute to the slimmer form factor. As always, Apple pays close attention to the details to achieve this.
Double DRAM dip
The Air 2 uses twice as much DRAM as the iPhone 6 and 6 Plus, at 2 GB, compared to 1 GB in the most recent iPhones. This additional memory likely is required to support graphics on the larger-sized display.
And….
The Air 2 adds a fingerprint sensor, which was not in first-generation Air. This technology is still relatively novel and unique to Apple, and represents a significant cost within the category of sensors inside the iPad Air.
The two camera modules appear to be the same as in the iPhone 6, with resolutions of 8 megapixels (MP) and 1.2 MP—without optical image stabilisation. This is an upgrade from the previous 5 MP and 1.2MP combination used in the previous-generation iPad Air.
IHS; www.ihs.com
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