At $329, the iPad mini is a fair bit pricier than its $199, 7" Android rivals. Then again, it also looks nicer and seems to be made out of higher-quality materials. Is the $329 price tag warranted, or is Apple simply safeguarding its notoriously high profit margin?
The folks at IHS picked an iPad mini apart in order to find out. I'm not seeing the report on IHS's website yet, but AllThingsD has published the numbers, and it says the iPad mini only costs "about $188" to build, according to IHS.
That compares to a total manufacturing cost of $166.75 for Google's 16GB Nexus 7 tablet as of early July, when IHS performed a similar teardown of that device. Perhaps that cost has gone down since then. Comparing the numbers directly, though, it would seem Apple charges about 65% more for a device that costs only 13% more to manufacture.
Interestingly, Apple may be paying more for the iPad mini's somewhat lackluster 1024x768 screen than Google did for the Nexus 7's 1280x800 panel at launch. AllThingsD quotes a price of $80 for "parts related to the display" in the iPad mini, while IHS estimated the cost of the Nexus 7's LCD panel and touch screen at around $62 all together.
I'm a little disappointed that Apple wasn't willing to squeeze its margins in order to outfit the iPad mini with a higher-res screen. Sticking with 1024x768 has its advantages, though, since apps don't need to be scaled and developers don't need to support yet another resolution. (The iPad 2 and the original iPad also have 1024x768 screens, and pretty much all existing iPad apps support them.)