But the teardown that Wall Street and the investment community is waiting on is the one from the market research firm IHS iSuppli, whose team spent all day Saturday in a furious effort to dissemble a 32-gigabyte iPad 2 and estimate the cost that Apple paid for every component. They gave me an exclusive early look at their findings.

The point is to form a partial picture of the gross profit margin on every unit, a figure that Apple generally keeps to itself. This information is useful to investors and analysts who then factor the findings in with other assumptions they use to predict how much of a profit Apple is going to report over the next few quarters.

The headline of iSuppli’s teardown researcher is always the estimated bill-of-materials cost, which is the sum cost that it thinks Apple has paid for all the hardware inside the iPad 2. It doesn’t take into account the cost to develop software, or other things like packaging, shipping and distribution, or manufacturing.

In this case the estimates are for the 32-gigabyte, 3G version of the iPad which sells for $729, and there are two estimates, one for the AT&T version–$326.60, and one for the Verizon Wireless version–$323.35. Some of the wireless chips used in the AT&T version are a little more expensive or require an extra part. For example, on the Verizon version, GPS is integrated with the Qualcomm-made wireless baseband chip. On the AT&T version, an extra GPS chip had to be added along with the Broadcom-made Bluteooth and Wi-Fi chips, adding an extra cost of $1.50 per unit.

The baseband wireless chips were naturally different because AT&T and Verizon use different wireless technologies. Intel, the new owner of the former wireless chip division of Infineon, supplied the main wireless chip in the AT&T version, with supporting chips coming from TriQuint Semiconductor and Skyworks for a combined cost of $18.70.

Qualcomm supplied the main wireless chip Verizon version, with supporting chips coming from Skyworks, Avago Technologies, and Murata for a combined cost of $16.35. While there had been some speculation that Apple had used a Qualcomm chip in both versions, but it turned out not to be the case.

Aside from the wireless chips, the components are otherwise identical across both versions. Both sport Apple’s A5 chip, and iSuppli says that Samsung is still manufacturing it for Apple at a cost of $14. While there had been some talk in recent weeks that Apple was moving its chip manufacturing contract to Tawain Semiconductor Manufacturing Corp, there’s no evidence that it has made such a move, at least not yet.

The most expensive component by far is the touch-sensitive display, coming at $127. ISuppli says that the LCD portion the unit they tore apart was built by LG Display, but Apple is known to use other sources for displays, including Samsung, and possibly ChiMei Innolux. The glass assembly covering the display is thought to come from TPK or WinTek. ISuppli says costs on the display are going up because manufacturing yields on LCDs have been lower. Apple is also thought to be using a more expensive glue to improve the efficiency of the process of bonding a new thinner type of Gorilla glass to the display.

Samsung supplied Apple with the NAND flash memory used in the iSuppli sample, holding on to a relationship that goes back several years to the days of the first iPod nano, though Toshiba is also known to supply Apple with flash. It is the world biggest consumer of flash memory, after all. Elpida supplied the DRAM memory. ISuppli estimates the combined cost of memory, both flash and DRAM plus a Micron-made MCP memory chip at $65.70.

Then there’s a set of components seen in the iPad 1 that remained the same in the iPad 2. STMicroelectronics supplied the gyroscope and the accelerometer, and AKM Semiconductor supplied the electronic compass. Broadcom supplied touch interface chips, while Texas Instruments supplied a touch screen driver chip. Analog Devices supplied a capacitive touch controller.

Finally there are the two cameras. ISuppli hasn’t yet named the suppliers there, though the usual candidate is Aptina, the former camera unit of Micron, though it’s possible that Apple sources them from more than one place.

ISuppli’s estimates are a lot higher than the findings of another teardown shop, UBM Techinsights. The Wall Street Journal reported that UBM’s cost estimate is about $270, but that estimate was made before it conducted its actual teardown, and didn’t change once it had.

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.

Certainly it belies Apple’s rank of last in a list of 29 multinational technology companies in terms of responsiveness and transparency. Forty percent of the suppliers included in Apple’s report said this was the first time their facility had ever been reviewed for social responsibility compliance. Which is worth noting. Surely Apple isn’t the only consumer electronics company they’re working with. Hear that HP? Nokia?

Anyway…

Detailed in the report are the findings of 127 facilities audits, including core violations of Apple’s Supplier Code of Conduct and Apple’s responses to them, which range from mandatory facility upgrades to the termination of business with violators (The company ended its relationship with 3 suppliers on 2010 for code violations). Sadly, Apple discovered 37 core violations in 2010, versus 17 the year before.

Also addressed, the sourcing of conflict-free “conflict minerals” like tantalum and tungsten, the n-hexane incident at Wintek and, of course, the suicides at Foxconn’s Shenzhen facility. Apple appears to have made significant headway on all three fronts, establishing a tantalum and tungsten smelter audit process, forcing Wintek to end its use of n-hexane and improve its ventilation systems and working with Foxconn to develop measures to prevent further suicides.

All good to hear, though obviously when an audit of 127 facilities turns up underage labor violations at nine facilities and hazardous chemicals at 80 more, there’s quite a bit more work to be done.

Driven by the steady proliferation of multitouch smartphones and tablets–one in particular–the worldwide touchscreen industry will probably see 30 percent year-over-year growth in 2010 by the time the year is over. So says NPD DisplaySearch, which figures suppliers shipped 6.3 million tablet/mini-note touchscreens in the first half of 2010 and more than 20 million in the second half. Quite the upward trend and one that we’ll almost certainly see continue next year as the iPad juggernaut rolls on, more Android tablets arrive at market and consumer and enterprise demand for all of them grows. Wintek and TPK Touch Solutions have a lot to look forward to next year.

The latest, from China Economic News, claims the device is being prepped for a February debut at a price somewhere between $799 and $999. Supply chain sources tell the publication the tablet will be built around a 9.6-inch Wintek capacitive touch panel and a mystery processor engineered by P.A. Semi, the boutique semiconductor design company Apple acquired in 2008. DynaPack International Technology will supply batteries, which are said to be “long lasting.”

Finally, the Apple (AAPL) device is said to support the high-speed downlink packet access 3G protocol. Interesting, since this likely means the tablet is destined for AT&T’s (T) network, not Verizon’s (VZ), as had been previously rumored, and lends credence to predictions that Apple will extend AT&T’s iPhone exclusivity deal rather than allow it to lapse.

The latest, from China Economic News, claims the device is being prepped for a February debut at a price somewhere between $799 and $999. Supply chain sources tell the publication the tablet will be built around a 9.6-inch Wintek capacitive touch panel and a mystery processor engineered by P.A. Semi, the boutique semiconductor design company Apple acquired in 2008. DynaPack International Technology will supply batteries, which are said to be “long lasting.”

Finally, the Apple (AAPL) device is said to support the high-speed downlink packet access 3G protocol. Interesting, since this likely means the tablet is destined for AT&T’s (T) network, not Verizon’s (VZ), as had been previously rumored, and lends credence to predictions that Apple will extend AT&T’s iPhone exclusivity deal rather than allow it to lapse.

“According to reliable information, Apple will not follow the current market trend (by producing netbooks with screens about 10.2 or 10.1 inches in diagonal length.) Instead, Apple will produce screens with about 9.7 inches in diagonal length. Touch screen will be installed. Wintek will be the main manufacturer of the touch screen.”

Beyond screen size, there are no other specifications mentioned in the report. But it does include a price: $800. Which is $300 more than the $500-piece-of-junk price point Apple CEO Steve Jobs cited when he dismissed netbooks last October. “There are some customers which we chose not to serve,” Jobs said at the time. “We don’t know how to make a $500 computer that’s not a piece of junk, and our DNA will not let us ship that.”

But will it allow Apple to ship an $800 one? Perhaps something with a P.A. Semi chip? Something that runs App Store apps and offers a sort of middle ground between the iPod touch and the MacBook?

UPDATE: Piper Jaffray analyst Gene Munster just weighed on these rumors in a research note. His thoughts, below:

On 7/13 Asian media reports suggested Apple is planning a tablet/netbook in Oct-09. Last week we spoke with a Taiwanese component supplier and continue to believe that Apple will launch a tablet, not a netbook, by early CY10. … We expect [it] to be a touchscreen device in the $500-$700 range (between the iPod Touch and MacBook).

[Image Credit: Adam Benton]

“There’s something I keep hearing, and I don’t think I’d rank it as high as a rumor, but it’s an interesting story that I keep hearing, that for awhile, trucks loaded with books would arrive at a loading dock on the Apple campus, and offload big, big, big, big, huge loads of books, and then the trucks would leave empty. And Apple does not have a 100,000-book employee library there on the Apple campus. So one is prone to believe that they’re doing something with these books, such as turning them into text for some purpose we can only guess at. There’s been a long-standing rumor that Apple has been silently preparing to open a bookstore on the iTunes store, and they want to make sure that they have a very large stock of electronic titles when they do open.”

Interesting, no? Especially in light of these new reports about 10-inch touchscreen devices. Could Apple be developing a new souped up e-book reader–a TouchBook, if you will? Something on which you could read books (in color), watch movies, surf the Web and create and edit documents? Something that would upend and redefine the e-book sector as we know it? And are the mysterious “books” to which Ihnatko refers really books and not the device themselves…

PREVIOUSLY:

• Coming Soon From Apple: Big Touch?
• iTablet: Apple’s Killer App for Higher Ed

And that would seem to belie claims by the company’s leadership that the term “Apple netbook” is an oxymoron. Asked during Apple’s Q4 earnings call last year if the company will ever enter the netbook market, CEO Steve Jobs said, “We don’t know how to make a $500 computer that’s not a piece of junk, and our DNA will not let us ship that….As we look at the NetBook category, that’s a nascent category. There’s as best as we can tell not a lot of them getting sold. You know, one of our entrants into that category, if you will, is the iPhone for browsing the Internet and doing e-mail and all the other things that a NetBook lets you do, and being connected via the cellular net wherever you are, an iPhone is a pretty good solution for that, and it fits in your pocket. But we’ll wait and see how that nascent category evolves and we’ve got some pretty interesting ideas if it does evolve.”

Certainly a kiss-off, yet one delivered with that “we could build a netbook that would blow your head off if we wanted to” caveat: We’ve got some pretty interesting ideas.

Apple COO Tim Cook was similarly dismissive of the netbook category during the company’s Q1 earnings call this year. “We’re watching [the netbook] space,” he said. “But, right now from our point of view, the products in there are principally based on hardware that’s much less powerful than we think customers want. Software technology that is not good, cramped keyboards small displays….And so, we don’t think that people are going to be pleased with those types of products. But we’ll see…it’s a category we watch. We’ve got some ideas here. But, right now we think the products there are inferior and will not provide an experience to customers that they’re happy with.”

Another harsh Apple kiss-off for the netbook category, yet like Jobs’s, it’s delivered with that “we’ve got some ideas” caveat–one that might just as easily be interpreted as “we’re going to redefine the category when we’re ready to.”

So what to make of this Commercial Times report? Like all Apple (AAPL) rumors, it could be something, could be nothing. But two things are certain: If Apple is planning to release a netbook it won’t be piece of junk. And it won’t sell it for $500, either.

[Image credit: Gizmodo]

And that would seem to belie claims by the company’s leadership that the term “Apple netbook” is an oxymoron. Asked during Apple’s Q4 earnings call last year if the company will ever enter the netbook market, CEO Steve Jobs said, “We don’t know how to make a $500 computer that’s not a piece of junk, and our DNA will not let us ship that….As we look at the NetBook category, that’s a nascent category. There’s as best as we can tell not a lot of them getting sold. You know, one of our entrants into that category, if you will, is the iPhone for browsing the Internet and doing e-mail and all the other things that a NetBook lets you do, and being connected via the cellular net wherever you are, an iPhone is a pretty good solution for that, and it fits in your pocket. But we’ll wait and see how that nascent category evolves and we’ve got some pretty interesting ideas if it does evolve.”

Certainly a kiss-off, yet one delivered with that “we could build a netbook that would blow your head off if we wanted to” caveat: We’ve got some pretty interesting ideas.

Apple COO Tim Cook was similarly dismissive of the netbook category during the company’s Q1 earnings call this year. “We’re watching [the netbook] space,” he said. “But, right now from our point of view, the products in there are principally based on hardware that’s much less powerful than we think customers want. Software technology that is not good, cramped keyboards small displays….And so, we don’t think that people are going to be pleased with those types of products. But we’ll see…it’s a category we watch. We’ve got some ideas here. But, right now we think the products there are inferior and will not provide an experience to customers that they’re happy with.”

Another harsh Apple kiss-off for the netbook category, yet like Jobs’s, it’s delivered with that “we’ve got some ideas” caveat–one that might just as easily be interpreted as “we’re going to redefine the category when we’re ready to.”

So what to make of this Commercial Times report? Like all Apple (AAPL) rumors, it could be something, could be nothing. But two things are certain: If Apple is planning to release a netbook it won’t be piece of junk. And it won’t sell it for $500, either.

[Image credit: Gizmodo]