updated 01:00 pm EST, Mon February 22, 2010
Modest dip into Apple's cash reserves
The A4 processor at the core of the iPad may have cost Apple as much as $1 billion to develop, says the New York Times. The newspaper notes that Apple is just one of several companies turning to ARM-based chip designs, including NVIDIA and Qualcomm. Even though the companies are contracting out their manufacturing to third-party sources, the billion-dollar ballpark for each company's work remains.
Adding a first-party factory into the equation can raise costs as high as $3 billion, the Times adds. The rush to produce ARM chips is believed to be related to the limitations of Intel's Atom processor. While common in netbooks, Atom hardware can also cost more than an ARM design, and simultaneously consume more power. Battery life is a particular concern for Apple, which has designed the iPad to both read books and watch video. It should in theory have a 10-hour life for functions like video.