The analysts at the market research firm IHS iSuppli, considered by the investment community to be the most reliable of the organizations that conduct teardowns, were among that set. Today, somewhere in Southern California, an iSuppli analyst stood in line at a store and promptly took an iPad to a lab, where it was torn into, initiating the interesting process of estimating what it all cost to build.

Here’s what iSuppli’s team found: First off, there weren’t many changes from the last iPad, in terms of suppliers. “It’s most of the same characters we saw last time around,” analyst Andrew Rassweiler told me today. Wireless chipmakers Qualcomm and Broadcom both reappeared — Qualcomm supplying a baseband processor chip, Broadcom a Bluetooth and Wi-Fi chip, TriQuint Semiconductor suppling some additional wireless parts. STMicroelectronics once again retained its position supplying the gyroscope. Cirrus Logic supplied an audio codec chip.

The 16 gigabyte, Wi-Fi-only iPad that sells for $499 costs about $316 to make, or about 63 percent of the device’s retail price. On the upper end, the 4G-ready 64GB model that sells for $829 costs about $409 to make, or about 49 percent of the retail price.

The new cost figures represent an increase of between 21 percent and 25 percent, depending on the model, from the iPad 2, which iSuppli tore down last year.

So what did they find inside? An expensive Samsung display, for one thing. All those millions of pixels don’t come cheap. ISuppli analyst Andrew Rassweiler estimates that the display, which cost $57 on the iPad 2, has grown in cost to $87 on the latest iPad.

Rassweiler says that two other vendors, LG Display and Sharp Electronics, have inked display supply deals with Apple for the latest iPad, but only Samsung is thought to have fully ramped up production. Depending on the vendor, the display may cost as much as $90, he said.

One set of components remained essentially the same as before: Those that drive the touchscreen capabilities. Rassweiler says that three Taiwanese companies, TPK, Wintek and Chi Mei, supply parts related to driving the central interface feature of the new iPad, but he says to expect a major shift in how Apple handles the touch interface on future iPads.

The combined cost of cameras, including the front-facing and back camera, is pegged at $12.35, more than three times the cost of cameras found on the iPad 2, Rassweiler says. But it’s essentially the same setup as that on the iPhone 4, he says. As has been the case with cameras, the identity of the supplier wasn’t easy to determine because they try hard to hide identifying information from the prying eyes of teardown analysts. The candidates, however, include Largan Precision Co., a Taiwanese supplier of camera modules to wireless phone companies, and Omnivision. On the iPhone 4S, a research firm called Chipworks identified the supplier of the CMOS sensor in one of the cameras as having come from Sony.

As with other Apple devices, the main processor chip is an Apple-made A5X processor, one manufactured under contract by Samsung. The estimated cost of that chip is $23, up from $14 on the iPad 2.

Another part that’s more expensive than on the last iPad, but also better for a variety of reasons, is the battery. This one is estimated to have cost Apple $32, up from $25 on the iPad 2. But it constitutes a significant upgrade, Rassweiler says, with 70 percent more capacity than before. Apple benefited in part by lower prices in the lithium polymer material used to make the battery, offsetting the cost of adding a vastly improved battery.

ISuppli wasn’t the only outfit conducting teardowns of the iPad today. An enthusiast site called iFixit that encourages consumers to learn how to repair and upgrade their own electronics, flew technicians to Australia to conduct its own teardown analysis.

Officials at some of Apple’s suppliers, who declined to be named, said the Cupertino, Calif.-based company has shown them screen designs for a new device with a screen size of around 8 inches, and said it is qualifying suppliers for it. Apple’s latest tablet, the iPad 2, comes with a 9.7-inch screen. It was launched last year.

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The country is now beginning the arduous job of cleaning up from the floods that killed upwards of 600 people and dealt a body blow to its industrial and manufacturing base.

One industry hit especially hard is the computer business. The world relies on factories in Thailand to turn out critical components used to build hard drives, and factories there are out of commission for now. This is not a trivial problem — the factories in question are not easy to replace, retool and restart once they dry out. Nor is the answer simply for the hard drive manufacturers to build new factories somewhere outside the flood zone.

This is the kind of supply chain disruption that the computer industry hasn’t seen in many years. I had a chance to talk with Steve Luczo, the CEO of Seagate Technology, for his view of the situation. Seagate has been relatively lucky in that its factories haven’t been directly impacted like those of Western Digital and Toshiba. But many companies that supply Seagate with necessary components have been hit, and it will be some time before they’re back on their feet.

Luczo told me that the computer industry as a whole — including companies who make PCs, servers, workstations and any other device that contains a hard drive, whether a set-top box or an enterprise storage device — can expect acute supply-chain disruptions to last well into 2012, and that it will take until the end of 2013 for the industry to return to its pre-flood operating posture. You read that right: It will be two years before the supply of hard drives is anywhere near “back to normal,” and there are simply no easy solutions for getting it fixed.

An estimate by the market research firm IHS iSuppli pegs the available supply at 125 million units, which is about 29 percent short of demand of 175 million units. By its reckoning, more than one-quarter of the world’s hard drive manufacturing capacity has been disrupted in one way or another, including 45 percent of the capacity devoted to making hard drives for personal computers. I spoke with Luczo by phone yesterday, and tossed in an extra eighth question because of the importance of the subject.

AllThingsD: Steve, at a high level, I think everyone understands the problem. There’s been a terrible flood in Thailand, and a lot of factories that make crucial parts for hard drives are out of commission. To that end, I think people expect this to be a temporary problem that works itself out in a couple of months. But you say it’s a much more complex problem than most people realize. You’re tracking this situation day to day, and probably hour by hour. So, how bad is it, really? And what’s likely to happen?

Luczo: What’s surprising to us is that even with all the data out there — we’re six weeks into it — there are a lot of fairly sophisticated companies that haven’t fully come to grips with the depth of the problem and the duration that is likely to occur. What is going to happen in the next couple of weeks is that the real shortage begins to show up right about now. There was already a lot of built inventory and a lot of finished goods moving through the system. And now all that is gone, and I think customers are starting to see shelves of parts go empty, and realizing that they’re not going to be filled for anywhere from one to two months. So the concern is heightened.

We heard Meg Whitman talk about this on HP’s earnings call Monday. She said HP stepped in and started doing some strategic buying. She says HP is going to see effects at least through the first half of next year. Apple talked about it on its earnings conference call, too. Are you hearing from them?

Tim Cook at Apple was way in front of this. I saw Tim the first week it happened, and took him through the situation, and in 15 minutes he understood the magnitude of it. Meg was on the second week of her job as CEO when I went to see her, and she got it right away. HP’s procurement VP, Tony Prophet, was also early to understand this. Companies like that reached out to us early on, because they understood that this is going to be an extended problem. They started asking for longer supply agreements. Deals that would typically last about a year, they’re now asking for two years.

How bad is it really going to be? What’s your outlier worst-case scenario, and then what do you think is a little more realistic?

If you think pre-flood, a mix [of products] that the customers need, the industry had the capacity to ship about 190 million units a quarter. Pre-flood, we expected the demand to be pretty consistent at about 180 million a quarter, with a bump in September 2012 for Windows 8. We now believe the March quarter is going to much more difficult than the December quarter, and December is going to be about 120 million or so. We think the March quarter will be about 120 million, in the best-case scenario. And that’s with customers mixing down pretty aggressively; and by that, I mean companies like Western Digital, who don’t have access to the sliders [a critical component in a drive], are shipping one- and two-headed devices so they can ship more units. So instead of shipping a drive that contains two disks and four heads, which is what the market needs right now, they’ll be shipping a one-disk, one-head or one-desk, two-head product. They’ll be maximizing the units they can sell, rather than shipping the product the customer actually needs. … So we see something like 130 million for March on the optimistic side, and then 150 million for June, 170 for September and then 190 million for December. And so by the end of 2012 you’re back to being close to industry demand. But even then, you’ve not included the impact of that missed 100 million units. And that will take another year to absorb, because it’s not like the industry is building new factories to chase that demand. We can’t over-invest to meet some bubble and then get stuck with excess capacity.

I think, intuitively, people expected companies like Seagate to just build more factories outside of the flood zone, but it’s not that simple, is it? Would this not be a moment to add capacity?

There are some in the investment community who think that’s what is going to happen, and that there will end up being a supply glut after all this is over, but it’s not the case. For us, it’s more a function of how to recover the supply chain and then work with the customer to get a good read on what their needs are for the next several quarters. If we see a multiquarter shortage that goes beyond what I described before, then we would think about maybe putting some capital in place. But we’re not going to do that to solve a temporary problem, because we end up being stuck with the excess capacity. Now if it turns out there is no recovery, and then the industry is more constrained than I first described — and that, by June, the industry is still 30-40 million units short and looks like it will be for the next six quarters — we might revisit. But then we’d want longer-term commitments to make sure we’re not overinvesting. But we’re not to that point yet.

What is this doing to prices? And what does that mean to the person who wants to buy a computer or server this year or next year?

If you look at a 10-year moving average trend, the industry has in general seen prices come down about 2 to 3 percent a quarter, and that is for a particular product. In 2009, there was a little price erosion, and that was because the storage industry recovered quickly from the recession. And there had been massive capital cutbacks, so there were big shortfalls through all of 2009 and into 2010. Then, when the Greece crisis happened, that put a big flatline on a lot of growth, and the industry had put in a lot of capital because everyone expected there would be growth. So, since spring of 2010, the price erosion has been higher than normal, which would show that supply is greater than demand. And what this flood has done is drive the supply curve down, while the demand curve has stayed constant. For OEMs [original equipment manufacturers, or the PC and server manufacturers like Apple, HP and Dell, who buy directly from Seagate], you’re seeing an average increase of about 20 percent, and in the channel [resellers who sell parts to smaller PC and server vendors], probably much higher. So all the sensational quotes you see about pricing are about those that occur in the channel, where we have no control whatsoever.

The markups in the channel are much higher? Are the channel guys taking advantage of this?

Yes, they’re higher, but I don’t think they’re taking advantage. I’ve heard stories about drives that we sell to OEMs for $60 that show up in the channel at $105. Normally the channel price is within about 10 percent of the OEM price. It’s just the law of supply and demand. They can’t get supply. The channel is getting about a third, at most, of the supply they would typically get. The OEMs are the ones with the supply agreements, so everyone in the channel is way short. In some market segments, supply is about 70 percent below what the demand is. And so those shortages are very acute. The channel is selling the few drives that are out there to whoever needs them the most and is willing to pay for them.

So what does all this mean for Seagate, specifically?

For us it’s a different story, because we’re going to be driving more volume than our competitors, because we’re not as directly affected, and we’re going to be making some  technology transitions. When we do that, it lets us take cost out of our product, so we can offer more capacity for the same or fewer parts. That helps us drive down pricing. Our goal is to recapture some of the more aggressive pricing of the last eight quarters, in order to sort of get our business back in balance. Our long-term business model calls for gross margins of 22 to 26 percent. And we use our manufacturing expertise to drive down our costs and then pass that on to our customers. This quarter, end users really won’t see it, because product has been built and has been on the shelves. As the shortages just started occurring, you’re starting to see prices increase in the channel. And then at the OEM there will be shortages in some high-value areas like enterprise storage or cloud computing. You’re going to have to see price increases, because there’s such big shortages.

One thing that occurred to me when I first wrote about this a month or so ago is that it represents an opportunity for the flash memory chip companies to make some inroads against hard-drive guys like you, mainly on notebooks. Is there a threat that flash could pick up some of the demand?

Some of it, but not very much. I think to the extent that there is a high value purchaser who can afford to pay $200 for 100 gigabytes, then that market will expand from 1-2 percent to 3-4 percent. Of the 35 to 40 percent shortage that exists, could you see a little of that get absorbed by silicon? The answer is yes. But there’s a cap. There’s just not enough of a raw supply of silicon to meet all the demand. Our industry will ship 400 exabytes this year. We would have shipped 450, were it not for the floods. Of that, 180 exabytes is notebooks. Reduce that by 30 percent, and you get about 55 or 60 exabytes. If you were to take all of the capacity from Samsung’s newest state-of-the-art flash factory, and dedicated it just to notebooks, it would only put out 7 exabytes a year. Plus, there are already other markets demanding flash, like  tablets and cellphones and other things. So it’s not like you can steal from those other markets. You’re not going to take a $32 product and replace it with a $350 product. Can you do it at the edges of the market? Sure. But the threat is capped by the amount of silicon available and the price point for flash storage, which is still an order of magnitude higher.

Yesterday, I published a story about the teardown analysis by IHS iSuppli of Amazon’s Kindle Fire tablet. And, as you may remember, the story related how, in the opinion of its analysts, it cost Amazon $201.70 to buy the parts and build the Fire — a sum which is only slightly above the $199 retail price of the device.

The other big news was how dominant the chipmaker Texas Instruments is among the suppliers. Its applications processor chip, wireless chips, and audio and power management chips add up to about $25, approximately 12 percent of the bill of materials (BOM), which is the aggregate cost of all the components. It’s a pretty solid victory for TI in the competitive tablet field, where, outside of Apple’s iPad, success has been rare.

Naturally, I asked Texas Instruments for a comment about this, and expected none. I’ve been writing teardown stories for six years (here’s the first I ever did); never once has the manufacturer of the device in question, nor any of its suppliers, given anything more than a “no comment.”

Manufacturers tend to hate teardowns because they’re invasive. Take a product apart and you find out who a company is working with — and you learn a lot about how they see things. With the Kindle Fire, for example, we learned that Amazon deliberately took a “less is more” approach to keep costs down, minimize its loss and pave the way to eventually selling the device at a profit.

Suppliers hate teardowns, too. There is nothing more secret — or more interesting to know — than what company is supplying a manufacturer with a key component. Companies can rise or fall on a strategic relationship with someone like Apple or HP — or Amazon. The first iPod, for example, put an otherwise unknown company named PortalPlayer on the map — until Apple replaced its chips with something else. Now that company is part of Nvidia.

Usually these suppliers are unwilling to rock the boat, and usually they’re covered by nondisclosure agreements. So when I do the typical reporter thing and call them for a comment, after a teardown clearly shows their chip or display or other component inside the product, the supplier always — 100 percent of the time, without exception — says, “No comment.” Probably they’d like nothing more than to brag about how their chip makes this or that product do amazing things, but usually they just can’t, won’t and just don’t say a word.

Until today. Today, in response to my questions of yesterday, I got a comment from Texas Instruments. And that meant I just had to share it. Here it is, courtesy of a company spokeswoman:

“We can confirm that TI’s OMAP4430 processor and WiLink 6.0 connectivity combo solution are inside of the Kindle Fire. … TI is thrilled to be a part of the Amazon Kindle Fire, which boasts powerful performance and engaging consumer experiences that are sure to make it a coveted device this holiday season.”

Not exactly riveting. But rare!

Western Digital CEO John Coyne warned yesterday on a conference call with analysts that the company expects significant impact to its hard-drive manufacturing operations in that country. It is one of several tech companies that has suspended operations in Thailand amid the worst flooding there in a half century.

Seagate, which reported earnings yesterday, also has operations in Thailand and said those are running at full capacity, but that some of its component suppliers have been affected by the floods.

“Given the severity of the situation and the extensive supply constraints caused by the disruption … the effects on our industry are likely to be substantial and will extend over multiple quarters,” Seagate said in a statement.

With the prospect of an industrywide shortage of hard drives affecting one vendor but not the other, shares of Seagate today shot up by $3.36, or more than 27 percent, to $15.42; Western Digital fell nearly 10 percent yesterday, but recovered today.

I checked in with Fang Zhang, who tracks storage for IHS iSuppli, the research firm that covers the electronics supply chain. While it’s too early yet to know the full impact, her initial estimate says that the worldwide production of hard drives will drop by about 30 percent, from 176 million units projected pre-flood to 125 million drives in the fourth quarter.

Apple CEO Tim Cook addressed the potential for a shortage on Apple’s earnings call with analysts on Tuesday because, naturally, it will affect his ability to turn out Macs this quarter and probably into next year. “I’m virtually certain there will be an overall industry shortage of disk drives as a result of the disaster,” he said.

One question I have is whether this could turn out to be an opportunity for the solid-state storage companies — the main supplier that comes to mind here is Samsung — that are popularizing flash-memory based storage drives in PCs like the MacBook Air and other machines. Will they boost production to fill that gap?

(Image via Consumer Queen.)

Inside, the phone is similar too, but there have been some strategic changes from one generation to the next that have important implications for Apple’s many suppliers. According to a teardown analysis conducted by the research firm IHS iSuppli, chipmaker Intel, which last year acquired the wireless operations of the German chip concern Infineon, has been almost entirely bounced out of the 4S in favor of a set of chips from Qualcomm. The shift to Qualcomm had been rumored as far back as last September.

Before Intel acquired its wireless unit, Infineon had previously supplied Apple with a chip known as a baseband processor that Apple had used in combination with chips from Skyworks and Triquint to work with wireless phone networks. “Qualcomm is the big winner here,” says Andrew Rassweiler, an analyst with IHS iSuppli who conducted the teardown. “It is selling Apple a whole suite of chips that adds up to about $14 to $15 per iPhone.”

Intel spent $1.4 billion to acquire Infineon’s wireless chip operations last year in a move seen as meant to shore up its presence in the wireless phone industry overall. It has struggled to win business for its Atom line of microprocessors, which are aimed at mobile devices like smartphones and tablets.

Infineon still has a small chip in the iPhone, but Rassweiler says it’s far less significant and a lot less costly than the one it supplied Apple before. “It’s almost like Apple threw them a bone with a 50-cent part after they lost a much more high profile chip that cost about $10,” he says. Intel had no comment.

ISuppli regularly conducts teardown studies of wireless phones and other consumer electronics devices in order to find out who a manufacturer’s vendors are — like most manufacturers, Apple prevents its suppliers from identifying themselves, much as they’d love to — but also to determine what each part costs. The combined cost of components — analysts check on the list prices of each part — is known as a bill-of-materials (BOM) estimate that gives a fair idea how much a manufacturer, in this case Apple, makes in gross margin on each device sold. Apple doesn’t disclose its gross margin on a per-product basis but when it reported its quarterly results yesterday it said its overall gross margin was 40.3 percent.

In the case of the iPhone 4S, Rassweiler estimates that the BOM cost ranges from $188 for the 16 gigabyte version of the iPhone 4S to $207 for the 32GB version and $245 for the 64GB version. Apple and its carrier partners sell the phones for $199, $299 and $399 respectively, typically with a two-year contract for wireless service that carriers use to subsidize the cost they pay Apple.

The costliest components are the ones that determine the price: Memory chips. Apple has been known in the past to rely mostly upon South Korea’s Samsung Electronics, the world’s largest supplier of memory, and from Japan’s Toshiba. In the phone that Rassweiler’s team tore down, the memory chips came from Samsung rival Hynix Semiconductor. “That struck us as a bit of a surprise,” Rassweiler says. It’s hard not to wonder if adding Hynix to the stable of iPhone memory suppliers is a partial response by Apple to the complicated patent fight it is waging with Samsung in courtrooms around the world.

Even so, Samsung appears to be have maintained its role as the manufacturer of the Apple-designed A5 processor that provides the iPhone 4S, and also the iPad 2, with most of its computing horsepower. Some published reports in recent months had suggested that because of the patent fight, Apple might end a relationship that dates back to the original iPhone and move its chip manufacturing contract to Taiwan Semiconductor Manufacturing Co., the huge chip manufacturing foundry. Rassweiler says there’s no sign on the latest A5 chips that that has occurred. “The markings are the same as what we saw in the iPad 2,” he says. The estimated cost for the A5 chip is $15 each, he says.

Apple started designing its own chips for the iPhone and iPad products beginning in 2010 with the release of the first iPad. The chip is thought to have been designed by teams from PA Semi and Intrinsity, two privately held chip design firms that Apple acquired in 2008 and 2010 respectively.

However, it’s also clear that the A5 chip is taking on more of the heavy computing lifting inside the device than the previous A4 chip, Rassweiler says. For example: The iPhone 4 contains a chip from privately held Audience Semiconductor, based in Mountain View, Calif., that handled noise cancellation. There’s no such chip inside the iPhone 4S, Rassweiler says, so it appears that noise-cancellation duties may have been moved to the beefier A5 chip itself.

Triquint Semiconductor provided a set of chips that make up a wireless transmit module that works with the wireless phone networks. Triquint has traditionally been an iPhone supplier, Rassweiler says, but the value of what it supplies to Apple appears to have dropped. One wireless chip company that has seen the value of what it supplies to Apple increase is Avago Technologies. Like Triquint, it too has been an iPhone supplier, but the overall value of the chips it supplies has gone up in the 4S.

STMicroelectronics, the European chipmaker, maintained its role as the supplier of gyroscope chips that help determine the phone’s position and rotate the screen for playing games and displaying pictures and videos. AKM Semiconductor again supplied the compass chip. Texas Instruments continued in its role supplying the chip that controls the iPhone’s display, and an audio chip.

One vendor could not be identified. Rassweiler says that Apple appears to have taken pains to hide the identity of the company that supplies the parts that power the iPhone 4S’s highly regarded 8 megapixel camera. This is not new, and the candidates include Largan Precision Co., a Taiwanese supplier of camera modules to wireless phone companies, and Omnivision. “We don’t know exactly who makes it,” Rassweiler told me. Whoever the supplier is, Rassweiler estimates the camera added $17.60 to the cost to build the iPhone. And they’re likely to make a lot on the deal. IHS iSuppli is forecasting that Apple will sell 81 million iPhone 4Ss around the world next year.

Update: A few of you have written in saying that it was Sony who supplied the camera. Maybe. The folks at Chipworks dissected the camera module and found a Sony-made CMOS image sensor inside it. That doesn’t make the whole module a Sony’s however. It could be a Sony camera or it could be that whoever made the camera used a Sony sensor. And last week Barron’s reported on some debate among analysts over whether or not Apple has split the camera supply contract 50-50 between Omnivision and Sony.

The Cupertino, Calif., company has ordered key components such as display panels and chips for a new iPad it is aiming to launch in early 2012, said the people.

The next generation iPad is expected to feature a high resolution display – 2048 by 1536 compared with 1024 by 768 in the iPad 2 – and Apple’s suppliers have already shipped small quantities of components for the sampling of the iPad 3. Suppliers said Apple has placed orders for a 9.7-inch screen device.

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Upstream component suppliers tell occasionally reliable Taiwanese trade mag Digitimes that labor and material shortages at Foxconn’s Chinese plants could undermine Apple’s aggressive iPad 2 shipment goals in the current quarter. Evidently the catastrophe in Japan has caused a shortage of both power amplifiers and memory for the tablet. That, combined with a lack of manpower at Foxconn’s Chengdu facility, is making it difficult for the manufacturer to satisfy Apple’s orders for 2.5 million to 3 million iPad 2s each month in the second quarter. Which is not to say that the company will fail to meet them–Foxconn says it’s doing all that it can to satisfy its clients’ needs–just that it’s more of a struggle than it might have been otherwise.

So the situation at Apple’s overseas manufacturing partners continues to be uncertain, just as the company said it would be during its last earnings call. “I am confident we’re going to produce a very large number for the quarter,” COO Tim Cook said. “Whether that will be enough to meet demand, I don’t know.”

Meanwhile, iPad ship times at Apple’s online store remain at 1 to 2 weeks.

PREVIOUSLY:

• Apple Supply Chain on Solid Ground Despite Japan Quake
• Apple “Aggressively Attacking” Supply Chain Situation in Japan
• Three Key iPad 2 Parts Available Only From Japan
• Apple’s Component Deals Should Help It Weather Japan Crisis

According to its latest 10-Q filing, Apple’s purchase commitments rose to $11 billion in the first quarter of 2011, up from $7.9 billion in the fourth quarter of 2010.

That’s a 39 percent increase and a record for the March quarter. Why the sudden uptick? Two reasons, most likely: the tight supply environment caused by recent calamities in Japan and the expected increases in iPad shipments.

Recall that during its last quarter, Apple sold every iPad 2 it could make and would have sold more had it been able to build them fast enough. The $11 billion in purchase commitments the company just made will likely make that possible. As COO Tim Cook said last week, “The iPad has the mother of all backlogs, but we’re working very hard to get [it] out to customers as quickly as we can.”

And according to COO Tim Cook, they’re not likely to disrupt them in the third quarter, either.

“We source hundreds, literally hundreds of items from Japan, and they range from components such as LCDs, optical drives, NAND flash and DRAM, to base materials such as resins, coatings, and foil that are part of the production process of several layers back in the supply chain,” Cook said during the company’s earnings call Wednesday. “The earthquake and subsequent tsunami and the associated nuclear crisis caused disruption for many of these suppliers. And many unaffected suppliers have been impacted by power interruptions.”

“But since the disaster, Apple employees have literally been working around the clock with our supplier partners in Japan and have been able to implement a number of contingency plans. Our preference from the beginning of this tragedy has been to remain with our long-term partners in Japan, and I have to say they have displayed an incredible resilience that I’ve personally never seen before in the aftermath of this disaster.”

That said, Cook cautioned that the situation in Japan remains volatile. “We know of no issue today that we view as unsolvable,” he said. “But the situation is still uncertain and there’s obviously no guarantees.”

The real impact of the disaster in Japan, then, will be on Apple’s revenue. To that end, Cook said he expects third quarter revenues to take a $200 million hit, which the company has already factored into its guidance. “[But that] economic impact pales in comparison to the human impact.”

PREVIOUSLY:

• Apple “Aggressively Attacking” Supply Chain Situation in Japan
• Three Key iPad 2 Parts Available Only From Japan
• Apple’s Component Deals Should Help It Weather Japan Crisis

As usual, the idea behind the teardown is not only to figure out who Nintendo’s component suppliers are and what parts are being used, but to estimate how much all the components cost to help guess how much of a profit margin Nintendo is making on each unit. And it looks like a decent margin. ISuppli says the cost of all the parts in the device itself plus what’s in the box amount to $103.25 for a device that’s selling at retail for $249. The cost works out to an increase of about $25 over the Nintendo DSi, the most recent Nintendo handheld, released in 2009, which cost about $78, when iSuppli tore it apart that year.

While most of the components come from Japan, it’s not entirely clear if the supply of any of the parts used come from areas affected by the earthquake and tsunami, says Andrew Rassweiler, an iSuppli analyst who supervised the teardown. “Many of these component should have a greater risk exposure to supply chain problems, though we don’t know about any specific disruptions at this point,” he said.

The most expensive component, as is often the case with consumer electronics, is the displays. The 3DS uses two Sharp displays that cost a combined $33.80. The headliner is the top screen 3D. It’s a 3.5-inch 800-by-240 pixel display that uses an LCD-based parallax barrier panel sandwiched to the back of the color LCD which alternates between the left and right images at a high rate of speed to produce the 3D effect. “It looks like a conventional LCD from the outside, but when you open the display you see that on one side of the glass is essentially the conventional color element, and on the other side of the glass is a monochrome element,” Rassweiler told me. “It’s a clever bit of display engineering.”

The handheld’s main chip is an applications processor. It’s a custom ARM-based chip manufactured by Sharp, that at a cost of $10.02 is only slightly more expensive than the chip in the previous Nintendo DSi. However, Nintendo has quadrupled the amount of flash memory in the 3DS versus the DSi to 16 gigabytes, and Samsung, the world’s largest manufacturer of flash, supplied it. Fujitsu supplied another type of memory known as fast-cycle RAM. Rassweiler says for this particular type of memory, Nintendo has used a type of chip that’s only made by Fujitsu, which is odd because FCRAM is widely available, and its unusual for consumer electronics manufacturers to “single source”–that is, rely upon a single supplier for an important component. The combined cost of memory on the 3DS worked out to $8.36, more than twice the cost of the memory found on the DSi.

Three chips related to the user interface cost a combined $6.81: an accelerometer from STMicroelectroncis, a gyroscope from Invensense, and an audio chip from Texas Instruments. Atheros, the Wi-Fi chipmaker that’s being acquired by Qualcomm, supplied a $5 Wi-Fi chip. TI and NEC supplied power management chips that cost $3.63. The 3DS contains three cameras, and though it’s not clear who supplied them–camera suppliers have gone to great lengths to hide their identities in recent years–iSuppli reckons their combined cost at $4.70.

Since I often get asked this question, let me say that iSuppli’s analysis focuses strictly on the materials used and doesn’t account for the cost to develop software or to license any patents. Nor does it account for the cost of any shipping or distribution or marketing. It’s just the raw cost of the hardware.

“Cash gives us tremendous security and flexibility. When you take risks, it’s like jumping up in the air, and it’s nice to know the ground will be there when you land.”

–Apple CEO Steve Jobs, February 2010

Here’s a good example of the tremendous security and flexibility afforded Apple by its massive cash reserves. Looking to secure a sufficient supply of the touch panels used in devices like the iPhone and iPad, Apple has reportedly signaled its willingness to pay more for them.

“To secure sufficient supply of touch panels used in the iPad and iPhone, Apple has talked with Taiwan-based makers, considering some room for them to hike quotes,” DigiTimes reports, adding, “In order to achieve its internal shipment goal of 40 million units of iPad in 2011, Apple has booked over 60 percent of the total touch panel capacity.”

That’s a wise move strategically. For while it might lower margins on some of the company’s hottest products, it will help to ensure their continuing availability after the recent disaster in Japan, which some worry will cause touch panel shortages. Plus, it raises the market price for components, putting further pressure on less cash-rich rivals.

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• Three Key iPad 2 Parts Available Only From Japan
• Apple’s Component Deals Should Help It Weather Japan Crisis

The quake struck hundreds of miles from many key chip plants, including most of the factories that account for the bulk of Japan’s flash-memory production. Most such factories are designed to withstand big quakes, and analysts expect little damage to structures or the costly machines that fabricate chips on silicon wafers.

But some manufacturers are likely to be affected by other issues, particularly disruptions in transportation of finished goods to airports or ports as well as the movement of employees and supplies to production plants. In addition, some of the biggest makers of consumer-electronics products that use chips are based in Japan, potentially affecting demand for chips.

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Companies from South Korea’s Samsung Electronics Co. and LG Display Co. to Japan’s Toshiba Corp. supply key components such as memory chips and flat-screens used in the iPad. But LG Display’s parent company, LG Electronics Inc., as well as Samsung and Toshiba compete with Apple in the burgeoning tablet space with their own devices.

If the new version of the iPad launched Wednesday is as successful as the original version, these component makers stand to benefit from an increase in sales, analysts say. But their profit margins could slip in tablets given their late entry into the market and because more devices are being launched this year, intensifying competition.

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According to Taiwanese trade mag DigiTimes, Apple has locked up nearly 60 percent of the world’s touch-panel capacity, leaving behind a very tight supply for its rivals to scrap over.

“Touch panels are currently suffering the most serious shortage due to Apple holding control over the capacity of major touch panel makers such as Wintek and TPK, and with US-based RIM, Motorola and Hewlett-Packard also competing for related components,” says DigiTimes. “Second-tier players are already out of the game.”

So Apple ends up with a double advantage–not only has it secured supply enough for its own needs, but it has also caused scarcity in the market and disadvantaged its rivals. It’s impossible to say definitively, but my guess is this is the result of that mysterious $3.9 billion component supply investment COO Tim Cook mentioned during Apple’s first-quarter earnings call.

“We’ve historically entered into certain agreements with different people to secure supply and other benefits. And the largest one in the recent past has been we signed a deal with several flash suppliers back at the end of 2005 that totaled over $1 billion because we anticipated that flash would become increasingly important across our entire product line and increasingly important to the industry. And so we wanted to secure supply for the company, and we think that, that was an absolutely fantastic use of Apple’s cash. And we constantly look for more of these. And so in the past several quarters we’ve identified another area and come to some recent agreements that [CFO Peter Oppenheimer] talked about in his opening comments, in that these payments consist of prepayments and capital for process equipment and tooling. And similar to the flash agreements, they’re focused in that area we feel is very strategic.”

Indeed. Funny how Apple now controls–largely—both the demand and supply sides of the touch panel business.

Supply chain sources tell China’s Economic Daily News that Apple has lined up four new component suppliers for the iPhone 5, which they claim is scheduled for a summer launch. Meanwhile, Taiwanese trade pub DigiTimes is reporting that Apple recently bolstered its printed circuit board (PCB) supply chain in preparation for the next iteration of the iPad. Where the company once used just three PCB suppliers for the device, it’s now using seven. Not a surprise, really, given the 14.8 million iPads Apple sold in 2010. DigiTimes’ sources claim they’re scheduled to begin small-volume shipments next month, before going all out in April. Which jibes nicely with that annual refresh cycle I mentioned earlier and rumors of a spring launch.

As I’ve noted here before, the iPad 2 is expected to be thinner than its predecessor and manufactured with the same unibody approach Apple’s been using for the MacBook. It’s also expected to feature an LCD backlit display, a front-facing camera and Facetime video chat support. Finally, some reports suggest it is powered by one of Qualcomm’s multimode chips and will run on both GSM and CDMA-based networks around the world.

Welcome to NewEnterprise, the latest in the ever-growing stable of offerings at All Things Digital.

I am Arik Hesseldahl and I’ll be following the world of information technology with an emphasis on the enterprise. This is a deliberately loose definition that encompasses a lot, so I expect I’ll have a lot of room to roam.

Consider for a minute all the different threads that can reasonably fall under the umbrella term “Enterprise IT”: Everyone loves Twitter and Facebook and Google, but when some part of them fails to work right, phrases like “Fail Whale” enter the popular lexicon, and careers, reputations and investments are all at risk.

When they do work, the people who assembled all the hardware and software become the unsung heroes. I’m fascinated by both scenarios, because in their own way they’re both great stories that others can learn from.

You can expect me to pay a great deal of attention to developments in the burgeoning cloud computing industry, and in the traditional enterprise IT business of selling computers and other products and services to large companies.

Beyond that I’ll be looking deeper at the chips and other components inside them, and the companies and people who make them.

And I’ll also be keeping an eye on issues relating to computer and network security, an issue that has suddenly taken on significant heft, as computer worms have evolved from stealing credit card numbers to attacking nuclear plants.

Plus, I’ll be on the lookout for new start-ups aiming to change the way things are done in the workplace.

I’ve covered technology for more than a decade, most recently for Bloomberg Businessweek, and for Forbes.com before that. In those years I’ve learned to treat buzzwords and hype cycles with suspicion and to question the so-called conventional wisdom wherever possible.

So, I promise to tell you what I think is going on in straight and simple terms, and in a jargon-free manner.

In short, I think we’ll have a great deal to talk about. And that’s where you come in. I’d like to hear from you. Give me feedback. Tell me what I’ve missed and where I could do better and also whether or not you agree with what I’m saying, or where you think the next important story is.

Leave a comment here or send an email (Arik@AllThingsD.com).

What I need most are thoughtful ideas and feedback from the people on the front lines at tech companies, and those making tech-related decisions at non-tech companies.

Remember those unsung heroes I mentioned before? They’re you. And NewEnterprise is nothing without you.

And it costs about a quarter as much to make it.

According to iSuppli, the bill of materials for the latest iteration of Apple’s $99 “hobby” is $64, significantly less than the $237 it cost the company to build the 2007 model.* That’s quite a disparity, one evidently driven as much by an adjustment of product vision as build (dumping that costly hard drive obviously didn’t hurt either). Where the original Apple TV was built like a small desktop PC, its successor is built more like an iPad, with a few of the same components; the two devices have an A4 processor in common, as well as Wi-Fi/Bluetooth and power management chips.

That evolution has given consumers a much-improved device with a pitch-perfect design (though it does have some serious shortcomings in the content department), and it’s given Apple (AAPL) better margins.

“Compared to the first-generation Apple TV, the new model offers a dramatically improved ratio of hardware cost to retail price,” iSuppli noted in its teardown analysis. “The initial version of the Apple TV appeared to be a near give-away or subsidized product for Apple, sold at prices that weren’t much more than the underlying hardware costs. With the second-generation version of the hardware, the Apple TV’s price is about 35 percent above its BOM and manufacturing cost.”

*The standard iSuppli caveats apply here. The company’s estimate accounts for hardware and manufacturing costs ONLY–R&D, software, licensing costs, etc. are not considered.

The company, which is expected this year to become the world’s largest technology manufacturer by sales, experienced big jumps in profits in its two component business–memory chips and liquid crystal display screens.

Its consumer product divisions, mainly cellphones and TVs, saw profit margins shrink due largely to price competition and increased marketing expenses.

Samsung executives said they expected the third and fourth quarters to be more of the same, though the profit squeeze in end products will likely be greater than the improvements in components.

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“We believe various news articles and competitor notes calling for a build delay were just false alarms,” he writes. The company, of course, has now set an April 3 launch for Wi-Fi versions of the iPad, with 3G versions to ship toward the end of April. Berger, who tracks the chip industry, thinks many iPhone component suppliers will also sell into the iPad, including Infineon (IFX), Skyworks (SKWS), Triquint (TQNT), Broadcom (BRCM) and Texas Instruments (TXN). Production in the 4-5 million unit range would “drive some material revenues” for these companies, he says, “particularly BRCM.”

Meanwhiile, Berger has revised his estimates on iPod, iPhone, notebook and desktop builds.

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That’s almost $5 less than the $179 T-Mobile is charging for the device with a two-year service plan. But its about a third of the phone’s unsubsidized price–$530.

Which is interesting because, according to Google (GOOG) VP of Engineering Andy Rubin, the guy who quarterbacked the Nexus One’s development, smartphones, even “super” ones–shouldn’t be that expensive. “The thing I carry around in my pocket every day…shouldn’t cost four hundred dollars,” Rubin once told Ken Auletta, author of “Googled: The End of the World As We Know It.” “That’s absurd. If you add up all the components, somebody is making a lot of money.”

That somebody, in this case, would appear to be Google–though to be fair, iSuppli’s analysis doesn’t account for manufacturing, packaging, and software expenses, not to mention R&D costs, which are likely quite substantial.

One last point worth noting here, the Nexus One’s teardown cost is slightly more than that of Apple’s (AAPL) iPhone 3GS. iSuppli figures the cost of materials for that device is about $172.46.

The Apple (AAPL) tablet, an Internet-connected, touch-screen device, has dominated the tech blogosphere in recent weeks, even though it hasn’t been formally announced by the secretive company. The Journal reported that Apple is in talks with TV networks for a related subscription service, and outlets have also discussed the possible component makers that will work with Apple.

Apple watchers expect the company–maybe even Steve Jobs, who has been closely involved with the tablet’s development–to unveil the tablet in three weeks (Jan. 27, according to All Things D), and while Apple won’t be at CES, you can bet that attendees and exhibitors will be talking about it.

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LCD makers in Asia have just started to see their earnings recover in the second quarter after prices began to rise thanks to production cuts made last year, component shortages and strong demand from China. But another supply glut could be looming as soon as the current quarter as companies such as Sharp Corp., Samsung Electronics Co., LG Display Co. and AU Optronics Corp. ramp up production from new lines.

“With the glass shortage diminishing in Taiwan, and [eighth-generation plants] ramping up in Korea, supply is growing faster than demand,” said Paul Semenza, senior vice president at U.S. market research firm DisplaySearch.

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Sanderson cut his FY ’09 EPS estimate to $3.43 from $3.54; for FY 2010, he goes to $3.75, from $4.25. His sales estimates fall to $11 billion from $11.2 billion for ’09, and to $14.7 billion from $15.4 billion for 2010.

“Component orders have come down over the past several weeks,” he writes in a research note. “RIMM was building for a best case scenario which has been removed.”

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