Amazon capitalizes on Apple iPad materials that cost $260

In the past few years, Apple has taken few, if any, uncalculated risks that have propelled any sort of whirlwind of negativity towards the brand. Whether developing or introducing a product like the iPod, iPhone, or iBook, each has had it's place in the market. Apple hopes the same will be true with the new iPad, but with an amped up price and intriguing product positioning (somewhere between the iTouch and iBook), it will be interesting to see if Apple's quick release of the iPad may have been too soon.

How so?

Apple set the price of the iPad at $499 and like any Apple product, it will stay that way until Apple is willing to adjust the price point. When determining that price, Apple had to take into consideration factors like research and development, raw parts, manufacturing and labor, overhead, and post production costs like marketing and sales.

The cost is carefully evaluated according to supply and demand and walla!, Apple has a product like the iPad priced just under $250 more than the original Amazon Kindle and Barnes & Noble Nook.

Apple's iPad price certainly can't compete with the Amazon Kindle and Barnes & Noble Nook if it were only an e-reader. Fortunately, it offers a whole lot more. It may have to compete, however, with the next generation of Amazon Kindles and that could be a tough task if you start comparing price for raw parts like the touch screen.

According to iSuppli, the new iPad, in total for all it's parts, costs $259.60. The most significant portion of that cost, $109.50, is user-interface related. The touch screen alone is priced at $65, which is more than 25% of the cost for all the materials.

So how does this compete with Amazon ?

Amazon, in February, announced the acquisition of the touch screen company, Touchco, who is currently developing a touch screen priced at $10 per square foot. The touch screen will have an unlimited number of simultaneous touch points and will be be sensitive to different levels of pressure.

The $65 iPad touch screen on the other hand utilizes multi-touch technology with limited touch points, but the touch screen is pressure sensitive. iSupply estimates an assembly cost of $30 per LED touch screen, and it is believed that LG supplied the 9.7" screen.

Considering Amazon now owns Touchco, the future touch screen Kindle could be a big time player with advanced touch screen capabilities at a minimal screen cost. Imagine a touch screen that not only registers every touch point, but that can also be thrown away and replaced for only $10.

iSuppli reports that Apple is looking into other screen suppliers which could give Apple a better price, but potentially without the capabilities of the Kindle touch screens.

Expect some jockeying between Apple and Amazon when Amazon releases the touch screen Kindle.