TightWind is written by Kyle Baxter. Stay Hungry. Stay Foolish.

Based on iSuppli’s estimates of iPad manufacturing costs, which found that the 3G, 64GB costs $346 to manufacture, TechCrunch posted a piece today that suggests Apple shift the 32GB and 64GB models down in price and still retain a large profit margin:

So what if Apple got back on the keeping it simple bandwagon, only offered the high-end 64GB with 3G iPad and still sold it for $499? After all, the company would still be making at least $153 on each iPad sold. Would that turn around the iPad’s outlook?

Besides iSuppli not even having a model to tear down to estimate part cost, there’s one other small… inconsequential… problem for TechCrunch: the cost of parts aren’t the only things that make up a product’s costs.

When a product’s profit margin is calculated, overhead is included. Other costs, such as research and development, affect the product’s cost as well. All of these are beyond mere part costs, and should be considered to understand a product’s true cost and thus its actual profit margin.

It’s easy to see just how wrong TechCrunch’s calculation is. If the 3G, 64GB iPad only costs Apple $346, and it is sold for $829, Apple’s profit margin on it would be 58.2%. While we don’t know gross profit margins for specific Apple products, we do know what Apple expects their average margin to be in the next quarter (which has the iPad factored in), and that’s 39%.

So it’s either that the iPad is just tremendously profitable, and other products with low margins are bringing down the average, or TechCrunch’s calculation is absolutely wrong. The latter, of course, is more likely, because the iPhone enjoys high profit margins and the Mac has healthy margins as well.

This is why relying on these cost estimates as indicative of how much each product actually costs Apple is worthless: they aren’t the only costs, and the other costs are quite significant.