Inside Microsoft Surface and Amazon Kindle Fire HD

"One big winner with the Surface appears to be Samsung. With one key exception —building the main processor chips —Samsung has been pushed out of Apple's iPad and iPhone products. For the Surface, Samsung supplied the display, the memory chips and the battery, amounting to about $137, or about half of the $271 bill-of-materials (BOM) cost."

Ron
http://www.maltiel-consulting.com/





Two More Teardowns Look Inside Microsoft Surface and Amazon Kindle Fire HD
Arik Hesseldahl  November 6


You have to credit the folks over at research firm IHS, because, apparently, they’ve pulling a little bit of overtime. Along with the teardown of Apple’s iPad mini, the results of which they sent to AllThingsD yesterday, they also included their first looks inside Microsoft’s Surface and Amazon’s seven-inch Kindle Fire HD.


Let’s get to the Surface first. (That’s a picture of it taken apart, at right.) With a base price of $499 for a 32 gigabyte Surface without the Touch Cover accessory, IHS estimates that the cost of components used to build it amount to $271 for a starter 32GB model, without the cover. The main components include a Tegra 3 processor chip from Nvidia, and a display and memory chips from Samsung. (Of course, Microsoft is probably buying memory chips from more than one vendor.)

Analyst Andrew Rassweiler, who led the IHS teardown team, said that Microsoft is using the relatively low entry price as a base, in hope of enticing consumers to buy higher-end models with the Touch Cover and higher memory capacity. The Touch Cover, which my colleague Walt Mossberg liked in his review of the Surface, costs $120 when purchased separately, and is bundled with the higher-end models.

Rassweiler estimates the cost of the parts used to build the Touch Cover at about $16, making it appear to be pretty profitable. It contains chips from Atmel and Freescale Semiconductor, he says. “It’s a compelling accessory for users to have, and a great example of a way in which manufacturers get consumers interested with a base price, and hope they’ll impulsively opt for extra features that make more profit,” he told me. Accessories always have higher profit margins than the devices they are intended to be sold with, Rassweiler says, and protective cases for phones and tablets always tend to sell well.

One big winner with the Surface appears to be Samsung. With one key exception — building the main processor chips — Samsung has been pushed out of Apple’s iPad and iPhone products. For the Surface, Samsung supplied the display, the memory chips and the battery, amounting to about $137, or about half of the $271 bill-of-materials (BOM) cost.

Now, on to the Kindle Fire HD. (Seen in its exploded view at right; click to make bigger.) Recall that the last Kindle Fire to get the teardown treatment came in with a cost estimate of $202 (later revised down to about $187) against a retail price of $199, meaning that Amazon was close or near to losing money on the hardware, and was hoping to make it back on the sale of content from its digital store, and even on sales of physical goods from its retail store. One estimate earlier this year suggested that Amazon makes more than $100 off each Kindle Fire. It’s probably pretty close to breakeven, if slightly profitable this time around, Rassweiler told me. Amazon CEO Jeff Bezos has said the devices are sold at cost.

Like the old one, the new Kindle Fire HD sells for a starting price of $199, and carries a combined cost of components of $165, according to IHS estimates. Key suppliers are LG Display, which made the screen; Texas Instruments, which repeated its role as the supplier of the main processing chip, plus power and video chips; and Samsung, which provided the memory.

Microsoft Surface TearDown

"Prominent ICs chips on the Surface motherboard: 

• Purplish-Blue (R26, G48, B231; #1a30e7): Marvell 88W8797-BMP2 wireless MIMO SoC

• Greenish-Yellow (R228, G230, B74; #e4e64a): Micron 2RE22 D9QBJ 2 GB DDR3 SDRAM

• Greyish-Red (R163, G50, B25; #a33219): Nvidia quad-core 1.4GHz Tegra 3 ARM-based microprocessor

• Bluish-Green (R97, G171, B162; #61aba2): Texas Instruments TPS659110 power management IC

• Brownish-Orange (R198, G112, B36; #c67024): Samsung KLMBG4GE4A eMMC 32GB NAND Flash

• Pale Violet with a Trace of Mauve (R181, G92, B227; #b55ce3): Wolfson 8962E ultra low power stereo audio codec

• Cypress Semiconductor CY8C20466A capacitive touchscreen controller
• Atmel MXT1386 touchscreen controller
• M430 G2402
• 1600P E284A " (from iFixIt's and theregistry.co.uk)

 more at Latest Microsoft Surface TearDown




Ron Maltiel

http://www.maltiel-consulting.com/

  

 

 

Microsoft Surface Teardown

We got our hands on Microsoft's new Surface, and to its credit, it lasted a good twenty minutes before we decided to tear it open.

 

Step 1 — Microsoft Surface Teardown 

Is that the display assembly from a PC laptop? Nope, it's the new Microsoft Surface with Windows RT.

Notable tech specs:

•  0.6" ClearType HD Display (resolution of 1366x768 pixels)
• Quad-core NVIDIA Tegra 3 processor
• 2 GB RAM
• 32 or 64 GB flash storage
• Wi-Fi (802.11a/b/g/n) + Bluetooth 4.0
• 720p HD Front and Rear facing LifeCams

 

 

To give the Surface laptop-like connectivity, nearly every edge includes ports and buttons. They are (from left to right):

 

Magnetic charging, USB 2.0, and Micro-HDMI out on the right side

 Magnetic connection for the Touch Cover or Type Cover on the bottom

 Headphone jack and volume rocker on the left side 

Android vs iPad Sales 48% to 52%

Similar to the history of  android phones vs. iPhone sales growth, Android tablets sales are approaching iPad sales. Android tablet sales are likely to surpass iPad sales this year.

A key reason for android tablet's strength is the multitude of products made by many vendors using the Android platform. The introduction of a new kindle fire by Amazon and other vendors updating their offering will propel this trend.

It is very tough for a single company to control the market with just one dedicated product line.

The article below discusses that the Android tablet is growing faster than iPad " In the year of 2012, Android holds a whopping 48% of all U.S. tablet sales, bringing Apple’s iPad into reach at just 52%"


Ron
http://www.maltiel-consulting.com/



Pew Research: Android Up to 48% of U.S. Tablet Sales, iPad Drops to Low of 52%
by: Tim-o-tato 10.02.12

A new study from the Pew Research Center has pegged Android at a spot in the tablet market that we didn’t think would come this early in the game. In the year of 2012, Android holds a whopping 48% of all U.S. tablet sales, bringing Apple’s iPad into reach at just 52%. Although, Amazon’s Kindle Fire accounts for a hefty 21% of Android’s tablet market success. And do keep in mind, these numbers do not reflect Nexus 7 or Kindle Fire HD sales yet.

The study also shows the world sales data, which differs quite a bit. According to the report, Apple still holds a commanding 61% of the world’s tablet market with Android coming in at a much lower 31%. But hey, things are looking up for Google’s Android. Once numbers are published reflecting the seemingly popular Nexus 7 and Kindle Fire HD tabs, these numbers are sure to change a wee bit.




14 Reasons for the Google Nexus 7 vs Nine Reasons for the Apple iPad 3 64GB
A detailed table is in the article.

An opposing view is at-
An iPad Lover’s Take On The Nexus 7
Mg Siegler Sunday, July 15th, 2012144

MG Siegler is a general partner at CrunchFund and a columnist for TechCrunch, where he has been writing since 2009. His focus is on Apple. Prior to TechCrunch, MG covered various technology beats for VentureBeat. Originally from Ohio, MG attended the University of Michigan in Ann Arbor, MI. He’s previously lived in Los Angeles where he worked in Hollywood and in... → Learn More

Trolls, feel free to skip to the bottom of this column and post your comments immediately without reading a word. Actually, who are we kidding — you didn’t make it this far.

Everyone else, brace yourselves. You may want small children to leave the room. I’m about to do something I don’t do often — something I always said I’d do if the product deserved

Apple iPhone 2x Profit vs.iPad

The article below compares iPhone vs iPad gross margin based on expert report in Apple patent litigation court filling .

Flash NAND profit are $50 for Google's Nexus (Nexus 7 Tablet Teardown: +4% Mem. Cost Add $50 Profit ).  How big portion of  iPhone and iPad profit margin is flash NAND?

The article assigns the 2x gross margins of  iPhone vs iPad "to the cell phone contract and the subsidies that the networks pay to Apple for each handset"

"Apple Inc earned gross margins of 49 to 58 percent on its U.S. iPhone sales between April 2010 and the end of March 2012. Between October 2010 and the end of March 2012, Apple had gross margins of 23 to 32 percent on its U.S. iPad sales, which generated revenue of more than $13 billion for Apple"


Ron





Apple makes twice the profit margins on U.S. iPhone sales as it does iPad

http://www.imore.com/apple-makes-huge-profit-margins-us-iphone-sales-ipad-only-half-good
By Chris Oldroyd, Friday, Jul 27, 2012 a 7:34 am
 
It appears that Apple is making huge profit margins on United States iPhone sales according to figures revealed in a court filing yesterday. Apple never reveals its profit margins on any of its products individually, for obvious reasons, so this revelation spotted by Reuters makes interesting reading.




Apple Inc earned gross margins of 49 to 58 percent on its U.S. iPhone sales between April 2010 and the end of March 2012.



Between October 2010 and the end of March 2012, Apple had gross margins of 23 to 32 percent on its U.S. iPad sales, which generated revenue of more than $13 billion for Apple, the filing said. Apple does not typically disclose profit margins on individual products.



The main difference with the iPhone compared to the iPad is the cell phone contract and the subsidies that the networks pay to Apple for each handset. This obviously must account for a large proportion of the increased profit margin on iPhone models. Or, conversely, Apple is forced to lower margins on the iPad to get it under $500 for the base model, since there's no one subsidizing those sales.



It will be very interesting to see how the alleged iPad mini would fit into the profit margin percentage range. If Apple is willing to accept half the profit margin on current iPads as it does iPhones, how low could they go for a 7-inch iPad? iMore has previously heard $200 is the floor. If Apple is willing to take a short term drop in profit to ensure long term gains in market share, it certainly looks like there's room to blow the competition out of the water all together.



And most importantly, unlike Google with the Nexus 7 and Amazon with the Kindle Fire, which are sold roughly at or below cost, Apple might still make money off the sales.



Love them or hate them, these court cases with Samsung are starting to reveal some really interesting information.



Source: Reuters



Chris Oldroyd



UK editor at iMore, mobile technology lover and air conditioning design engineer.

Nexus 7 Tablet Teardown: +4% Mem. Cost Add $50 Profit

The article below shows the impact of adding flash NAND memory to the profit margin of Google's Nexus 7.

"Andrew Rassweiler, who leads the teardown team at IHS iSuppli, reckons that Google will break even on the 8GB model but turn a tidy profit on the 16GB model. “Like Apple, Google realizes it can boost its profit margin by offering more memory at a stair-step price point. It’s getting $50 more at retail for only $7.50 more in hardware cost, which sends $42.50 per unit straight to the bottom line.”

Ron




Google’s Nexus 7 Costs $152 to Make, IHS iSuppli Teardown Finds

http://allthingsd.com/20120711/googles-nexus-7-costs-152-to-make-ihs-isuppli-teardown-finds/
July 11, 2012 at 5:15 am PT


Google’s Nexus 7 tablet may be all about an attempt to compete with Apple’s incredibly popular iPad, but when you crack it open it sure looks an awful lot like Amazon’s Kindle Fire inside. (Read Walt Mossberg’s review of the Nexus 7 here.)




That’s the impression that analysts at the research house IHS iSuppli got when they did just that: They took a Nexus 7 apart in order to see what components are inside and to estimate what each of them costs. The early verdict, shared exclusively with AllThingsD, is that the low-end eight gigabyte model of the Nexus 7, which sells for $199, costs $151.75 to build.



The higher-end 16GB model, which sells for $249, costs $159.25, the difference being the cost of memory chips inside.



Andrew Rassweiler, who leads the teardown team at IHS iSuppli, reckons that Google will break even on the 8GB model but turn a tidy profit on the 16GB model. “Like Apple, Google realizes it can boost its profit margin by offering more memory at a stair-step price point. It’s getting $50 more at retail for only $7.50 more in hardware cost, which sends $42.50 per unit straight to the bottom line.”



The IHS iSuppli cost estimate is about $30 lower from an early estimate put out last month by another research firm, UBM Techinsights. However UBM’s estimate was made without having first obtained the hardware for analysis.



The Nexus 7 is similar to Amazon’s Kindle Fire tablet in many respects, but in others it has better features. For one thing, the Nexus has an as its main computing engine the Nvidia-made Tegra 3 processor. It’s a four-core chip, meaning it has four main processing brains. The Kindle Fire has a two-core OMAP 4430 processor from Texas Instruments. TI however supplied two chips for the Nexus 7, one a power-management chip, the other a low-voltage transmitter.



But the Nexus 7, manufactured by Asus for Google, also has a better display with a resolution of 1,280 pixels high by 800 pixels wide versus 1,024 by 600 for the Kindle Fire. Rassweiler said the display uses a technology known as in-plane switching, and added $38 to the hardware cost of the Nexus 7, versus $35 for the display in the Kindle Fire, Rassweiler said.



The Nexus also has a camera that added $2.50 in cost to the Nexus, and which the Kindle Fire lacks. The Nexus also has a chip from NXP that supports near field communications (NFC) a close-range wireless technology that’s intended for wireless commerce transactions. Broadcom supplied GPS receiver chips to support mapping functions.



One other part caught Rassweiler’s attention: A gyroscope and accelerometer from Invensense. While it’s common to see Invensense gyroscopes, it’s rare to see it combined with into the same chip with the accelerometer. Both are used to determine position and movement of the device. The only other combined gyro-accelerometer seen before, Rassweiler said, was seen in Samsung’s Galaxy SIII smart phone and was made by the European chipmaker STMicroelectronics.



All told, IHS iSuppli figures the Nexus 7 costs about $18 more to make than the Kindle Fire. But that’s likely to change soon. A New Kindle Fire with a better display this fall.