Based on what we know about the iPhone 3GS’ components, we can extrapolate a significant portion of the iPad’s hardware cost. ISuppli’s analysis shows that the 16GB iPhone 3GS costs Apple around $178 to source and manufacture. Based on the specifications and feature-set of the iPad, it’s not a giant leap to assume that many of components are shared between the iPad and the iPhone/iPod Touch, such as the NAND and controller, BlueTooth, audio decoder, and more.

Now, the entry-level iPad doesn’t have a camera (-$9.55) or 3G module (-($13+2.80+1.35)). That brings the cost down to close to $150.

Clearly, there are elements which add significant cost to the iPad. The much larger display, touch panel and the chassis material will cost more than their equivalent on the iPhone/iPod Touch.

The display + touch module on the smaller devices cost approximately $35. Looking at area and resolution, the new panel is around 6-7x the size. Yields of panels decrease with increasing sizes, but at the same time, the cost of the display controller doesn’t scale linearly with panel size. Plus, the panel itself probably has pretty high yields, considering there’s a plethora of ~10″ panels out there. The touch overlay may be another story, with its thousand-point multi-touch sensors. Let’s assume overall cost is just about linear with area, which brings us to around $200. That estimate is likely quite high, assuming worst case scenario.

That brings the cost of the iPad to approximately $320. Now, factor in the added cost of the larger battery and casing, plus some additional licensing cost for the ARM A9 core, if that is indeed what the Apple A4 processor is based on, and $350 is a reasonable estimate.

That means Apple is pulling in around 30% margins on the entry-level iPad. Upselling to the 3G models or more storage only increases that number. Most hardware manufacturers would harm small animals for that sort of pricing power.

Of course, this is all a rough back-of-the-envelope calculation, and in particular, my estimation for the panel may be off by quite a bit. However, an analyst at BroadPoint AmTech seems to think along the same lines. Apple is not going to take a huge margin cut on the iPad, even the entry-level model. His $100 estimate for the 9.7″ panel and touch overlay is also far more aggressive than mine.

We’ll see what the component list for the iPad looks like for certain, come late-March. I doubt Apple’s pushing its first loss-leader piece of hardware.

In the wake of Toyota’s massive recall and subsequent production halt for faulty accelerator pedals around the world, I think more people realize that foreign vehicles don’t have some God-given right to be more reliable. This is the domestics’ chance to capitalize with some psychological warfare.

Go Ford!

That bit is very important, as this settlement doesn’t make the ongoing investigations by the EU as well as the New York Attorney’s Office go away.

Amazing.

Upon news of the Oracle acquisition, some key remaining personnel at MySQL started jumping ship for greener pastures (or at least for the lifeboats). MySQL founder Mr. Widenius wrote a blog post regarding his thoughts on the Oracle acquisition and his fear that with key employees leaving the project, support and development could be put back years. That’s not something you want to hear as, say, a business holding a multi-year contract for MySQL service.

Now you may say, hey, but proprietary shops get bought out by other companies all the time! What’s to say things don’t go to hell in a hand basket even if you’re paying a company money for a closed system? And furthermore, doesn’t the open-sourciness of the project actually help when support runs dry?

I think the answer to this can be found in the analysis of organization mentality. Open source and closed source shops have very different mindsets when it comes to ‘ownership’. Money-grubbing companies bought out by other money-grubbing companies probably don’t have to change their mindsets as much as when an open source project is acquired by a commercial software business. There’s a pall cast over them. And for Oracle especially, there’s a certain stigma associated with Ellison and friends. I’m sure that’s why, unlike with the Sun acquisition, key members are fleeing the nest even before things finalize with Oracle. At least Sun was making strides towards open source with Java. Oracle, well, there are accounts that while acquisitions by Oracle are often associated with lots of money, it goes hand in hand with crushing moral.

In a capitalist market, it’s eat or be eaten. Unfortunately, due to the nature of most open source outfits, they’re on the snack end of most business transactions. And while I am all for open source projects, recent developments with MySQL clearly paint a less rosy picture for open source aspirations in enterprise. Would it be possible for Oracle to spin out MySQL as a separate entity? It certainly doesn’t match up well with Oracle’s business aspirations.

Furthermore, I found the advertisement below the Citigroup chart at Yahoo! Finance to be quite shocking.

Yes. That’s General Motors advertising its bailout plan.

What has the world come to?

1. The Canadian dollar is now a petro-currency. Canada’s exports consist mainly of resources, and more specifically, oil. With the slowing global economy, oil prices have fallen dramatically, dragging down the Canadian dollar along with it. Canada’s ‘fortunes’ are linked to the prices of the various resources we export. Although our financial system has weathered the brunt of the storm, other countries will experience slower growth, which means less oil consumed and slower consumption of base metals, hampering our economy nonetheless.
2. Supply. Although the U.S. Federal Reserve has been pumping money into the banking system to lubricate the gears, many banks are hoarding money, not willing to lend. Of course this defeats the point of the money inflows to the market, but despite the talk of hundreds upon hundreds of billions of dollars, not much of it is seeing light outside the banks.
3. Demand. Despite everything that’s happened in the United States, the greenback is still the choice currency during flights to safety. It is one of the global currencies that almost any business can be done with. In times of uncertainty, the U.S. dollar is the fallback for many people.

So despite a weakening U.S. economy, low interest rates, and a large money supply, its dollar still remains the de facto standard for world trade. Whether this financial crisis ends up being a turning point for that fact remains to be seen.