What would a the release of a headline-grabbing new consumer electronics device be without a handful of people buying them only to take them apart to see what’s going on inside?
So it goes with Hewlett-Packard’s TouchPad, the webOS-based answer to the king of tablet computing, Apple’s iPad. The teardown team at market research firm IHS iSuppli picked one up only to skulk around its insides. The picture at right (which you can click on to make bigger) is the exploded view of the device.
The one by iSuppli isn’t the only place that does these teardown reports, but its one of the few that also estimates the combined cost of the parts and materials used to build the device. These bill of materials, or “BOM” estimates as they’re called in industry parlance, are important indicators of the kind of profit margin a company can expect to see on a device on a per-unit basis. The BOM doesn’t take into account other costs that are impossible to estimate, such as software development, licensing of any intellectual property, distribution or marketing.
So what does the TouchPad cost to build? The teardown by iSuppli pegs the cost of the components used in the 16-gigabyte version, which sells for $499 at retail, at $306.65. Meanwhile, the 32-gigabyte version, which sells for $599, costs $328.65 to build. (The difference, obviously, is memory.) HP didn’t immediately comment on iSuppli’s findings.
As is often the case with tablets and notebooks, the display is the most expensive component in the device. In this case, HP went with a proven winner. It selected a 9.7-inch display from LG Electronics that is thought to either identical or very similar to the LG-made display that Apple used in the first generation iPad. Andrew Rassweiler, iSuppli’s senior director for teardowns pegged the cost at $69.
Internally speaking, the similarities to the iPad end there, Rassweiler told me. The components connected to the display that enable the touch-sensitive interface are different than on the iPad. Where Apple has favored chips from Broadcom and Texas Instruments, HP has gone with a set of six chips from Cypress Semiconductor to control the touchscreen. It costs $11.75, which makes it one of the more expensive touchscreen driver products on the market, Rassweiler said. Additionally, materials used to build the capacitive glass assembly that overlays the LCD display cost another $63.50. All in, components related to to the display come to a subtotal of $144.25, iSuppli estimates.
The next most expensive set of components are the memory. For the NAND-flash memory used for storing data, HP selected Sandisk’s iNand chips. The iSuppli teardown reckons that HP paid $23 for 16 gigabytes, and $45 for 32 gigabytes. Samsung provided eight gigabytes worth of system memory or DRAM for both models, at an estimated cost of $26.
The TouchPad’s main application processor is interesting both for who made it, Qualcomm, and for what it isn’t, a full-fledged member of its Snapdragon chip family. “This appears to be a Snapdragon derivative without the baseband functions that would normally be seen on a Snapdragon,” Rassweiler told me. The chip costs $20, iSuppli estimates. Chances are a fully-enabled Snapdragon chip will be used in a future model, he says.
For now, as The Wall Street Journal’s Walt Mossberg noted in his review of the TouchPad last week, the device is Wi-Fi only, but a model with the ability to connect to the cellular networks is planned.
It’s also clear from the teardown, Rassweiler said, that there’s room for the addition of other components down in the future. Plus other things are missing.
“We noticed there’s a gyroscope chip and an accelerometer, but we couldn’t find any GPS chips,” he said. “Plus when we looked at the design we noticed there seems to be a lot of breathing room inside to add additional parts without having to change the design.” More stuff to expect from a future 3G-ready TouchPad.
Qualcomm supplied several other chips. Its newly acquired Atheros subsidiary provided the Wi-Fi chips, at a cost of $2.60, and two power management chips that cost another $5 combined. Texas Instruments supplied four chips, three related to power management, and one display interface chip, that added $4.50 to the cost.
Of course, the TouchPad is not only intended to be successful device on its own for HP, but represents a new strategic opportunity. As in, HP wants to license the WebOS on the TouchPad to other manufacturers.
That makes it something of a showcase for the software’s capabilities. HP CEO Léo Apotheker discussed this possibility in his appearance last month at the ninth D: All Things Digital conference.
You can see his comments on the subject from the highlight clip below. And you can see the full interview here.