I am trained as an electronic manufacturing engineer (a specialised area of Mechanical Engineering). I have two Masters degrees in this area. Nothing fascinates me as much as opening up the innards of a high-tech product and marvelling at the precise organization of the individual parts. Together with my last few years of finance, I now wonder about the cost aspects and profit margin too.

Extremetech talks about the ‘Bill of Materials’ of a an Apple iMac. As a major Apple fan (I own a iPod Nano and iMac G5 and the Apple stock!), this was interesting to me. I plan to buy a MacBook Pro sometime this year.

Apple Computer’s hardware costs to create the new $1,299 dual-core Intel iMacs total about $898, according to analyst firm iSuppli.

The firm opened up one of the new iMacs, which were officially announced at Apple’s recent Macworld show, inventoried the contents, and came up with an estimated cost for the parts. The teardown did not include the mouse, keyboard, or other documentation included with the iMac, and not attempt to estimate Apple’s cost of developing its operating system and related software.

What iSuppli discovered, however, is that Apple selected components typically found within an Intel-based notebook PC, to minimize power consumption and the noise generated by fans to cool them.

“Users want quiet and powerful machines,” said Matthew Wilkins, senior analyst for compute platforms research for iSuppli, in a statement. “Intel is very focused on designing microprocessors that deliver the maximum performance without generating excessive heat or consuming huge amounts of power. For now, the Intel Core Duo fits that bill perfectly.”

Not surprisingly, Intel’s chips form the heart of the iMac, and the bulk of its cost. Inside the iMac, iSuppli found an Intel Core Duo T2400, which the firm estimated cost about $265 apiece. That, combined with the Intel 82945GM north bridge and related NH82801GBMSL8YB south bridge, added another $45 to the total.

On its web site, Intel advertises the Core Dup T2400 for $294, although those prices reflect a purchase of 1,000 processors at a time. The Apple volume discount ascribed to the iMac teardown would be an additional 11 percent.

The firm estimated that the included ATI Radeon X1600 graphics card cost approximately another $30, while the included 512 Mbytes of Samsung memory added another $20. iSuppli did not publicly break out the costs for the LG.Philips 17-inch LCD or the Maxtor DiamondMax 10 160-Gbyte SATA hard drive, leaving such details for its paying clients.

In addition, the iMac carries another $25 in test costs, the firm said.