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Intel iMac teardown reveals sub-$900 cost

updated 02:00 pm EST, Thu January 19, 2006

Intel iMac teardown

Apple's new Intel-based iMac carries a Bill of Materials (BOM) cost of $873, and uses Intel's mobile 945 core-logic chipset to support Intel's Core Duo processor. The teardown--performed by iSuppli--reveals an estimated microprocessor cost of $265, while the two-device chipset carries a cost of $45. Intel's CPU and Mobile 945 chipset together account for 35 percent of the new iMac's total BOM, and the chips are designed for use in notebook PCs rather than desktops. The new iMac carries a $25 manufacturing/test cost, raising the BOM to $898. The cost estimate does not, however, account for other items included in the box with the iMac such as the keyboard, mouse, and documentation. Apple's new low-end Intel-based iMac is shipping for $1,300 from the company's online store.

Other major elements contributing to the iMac's BOM cost include LG.Philips LCD's 17-inch wide-format LCD panel, Maxtor's DiamondMax 10/6L160M0HDD 160GB SATA hard drive, Intel's Northbridge memory controller ($31), ATI Technologies' Radeon X1600 graphics processor ($30), and Samsung's Double-Data Rate (DDR) SDRAM ($20).

iSuppli believes Apple's decision to use Intel's notebook-oriented solution in its desktop iMac was a logical move.

"Users want quiet and powerful machines," said Matthew Wilkins, senior analyst for compute platforms research for iSuppli. "Intel is very focused on designing microprocessors that deliver the maximum performance without generating excessive heat or consuming huge amounts of power. For now, the Intel Core Duo fits that bill perfectly."

Wilkens added that the development of an Intel-based iMac offers benefits for both Apple and Intel. From Intel's perspective, the Core Duo is the chip maker's first dual-core product designed for notebook PCs, and is part of the company's new Viiv digital entertainment initiative. Apple's perspective reveals that the Intel CPU enables the company to launch its first dual-core desktop and notebook products, whereas previously only its PowerMac G5 systems were available with dual-core CPUs.




by MacNN Staff

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Comments

  1. JulesLt

    Joined: Dec 1969

    0

    Quiet Machines

    Well, we won't get them while Flash adverts cause the fans to spin up!

  1. chas_m

    Moderator

    Joined: Dec 1969

    0

    $900 not accurate

    the keyboard, mouse, documentation AND PACKAGING, DISTRIBUTION AND ADVERTISING are all part of the raw cost of the machines NOT included in this report. Throw all that in, and the machine's true cost per unit probably approaches $1000. Now remember that Apple sells most of the machine (more than half, anyway) at less than the $1299 retail price, and you have a very close match between the true cost of the machine (round it up to $1,000 for argument's sake) and the wholesale or average selling price, which is probably around $1200.

    Oh look, a 20% markup -- exactly what Apple's been saying they make on the machines for several quarters now!

    IOW, I could have told you what the true cost-per-unit of the iMac was without touching a single s****.

  1. hayesk

    Joined: Dec 1969

    0

    Useless analysis

    Apple's employees must be paid too. That money has to come from somewhere. The problem with these "cost analyses" is that people read them and expect the final product to be priced only a few dollars more than this.

  1. Jesda

    Joined: Dec 1969

    0

    Anger

    Why is everyone so upset about the revelation of an iMac's internals?

  1. SinglessWithScruples

    Joined: Dec 1969

    0

    cost

    and you get the Mac OS, with all the goodies, which retails for $99 but after using mym wife's PC I find it PRICELESS.

    /kt http://www.singleswithscruples.com http://www.clubhause.com

  1. CaliforniaMac

    Joined: Dec 1969

    0

    No Windows cost

    If this had been a PC, they would have also included the OEM charge for a WindowsXp license. But what is the cost for the Intel-specific bits of Mac OS X (drivers, TPM, compilers, etc..) divided by the number of Intel-compatible units forecast to be sold over the next 60 months? To this, add the cost of the PowerPC-specific bits of Mac OS X (drivers, compilers, etc..), depreciated over the past 60 months and divided by the number of PowerPC-compatible units sold in that time. Finally, add the purchase cost of NeXT and the additional enhancements made by Apple to turn NeXTStep into Mac OS X, less write-offs for the bits that were discarded and depreciated by 120 months then divided by the count of units sold for the past 60 months and then the count of units projected to be sold for the next 60 months. The result (whew) is what it costs for the Mac operating system itself! Is that number less than the cost of licensing WindowsXp? Run an Excel "what-if" with those sales forecasts for the next 60 months and plot best and worst case differentials. Uh oh! What's more is that if you buy a copy of MS-OfficePro for Mac, the users usually wind up with a license for WindowsXp (included in VirtualPC) anyway. Is this a strong financial argument to run the non-UNIX portions of Mac OS X as an application layer ontop of the Windows kernel? Would that provide the same user experience for customers as Intel Macs, plus additional compatibility with more USB/FireWire/PCI/PCIX peripherals? What could convince MS to license "just the kernel (non-UI) portion of Windows Vista" to Apple? Is there not a court ruling now that might allow for that? Would it not be appropriate for Microsoft to charge less for Windowless-Windows than it would otherwise charge for OEM licensing full WindowsXP? In the old days, this would have been an insane suggestion because the kernel of Windows and the kernel of the Mac competed with each other on features and performance. These days, the kernel of the Mac is available as a free download (opendarwin.org) and Microsoft seems to have a legal imperative to share source code with competitors. So perhaps the time has come (with Intel Macs) to realize some more cost savings on that BOM!

  1. Peter Bonte

    Joined: Dec 1969

    0

    pissed

    Strange that some here find it a low figure, its not.

    I find it a high cost considering they need to have a 27% overall profit. I guess the material cost go's down after a few months.

  1. M80mayhem

    Joined: Dec 1969

    0

    Big freakin deal!

    Didn't someone try doing this with the Nano? What's with busting apart apples products to "discover" material costs? Do these people not take into consideration basic process costing principles? That $873 figure does not take into account conversion costs such as direct labor and overhead. I mean what the h***! Did I miss something? Is Apple not supposed to be making a profit on their products?

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