Realistically, it's the screen that's costing some.
eg. the Chinese have made the SmartQ 7" Linux/WinCE/Android Tablet and it sells for about $220. The smaller 5" model sells for about $150. A larger 10" LCD, especially a IPS panel, will cost a bit more.
So, you'd have to say at least $300-350 for the base unit without getting fancy.
That said, they went fancy with eco&metal parts vs. regular, plastic casing and such. Didn't go with standard battery packs, so that'll add to the manufacturing costs as well.
Break even, you'll see maybe $350-400 minimum.
Of course, if you had me buying a tablet something today, it would be the Viliv X70 for about the same $599 that iPads go for.
Why?
1) Full desktop OS = full application support.
Flash, Office, Video editing, YouTube, Firefox, Skype, etc.
FULL support, not some dumbed down iPad app or iPad's inability to view all of YouTube,etc out of the box.
2) SD card slot.
Can't imagine why them tablets out there like the Viliv, etc. have SD slots, but the iPad doesn't (despite the available space & it would have been so easy to put one in).
3) USB port.
Again, can't imagine why iPad doesn't have one while the other tablets out there do.
4) Webcam.
Ditto above. Did Apple somehow forget people use Skype? Internet chatting? etc. (Let's not get into the speculation already that Apple ripped out their camera module at the last minute.... perhaps just to push up sales... Sell the camera-less model today, make everyone upgrade later when the 'new' camera model comes out in a year.)
5) 128GB SSD HD option.
64GB is good on the iPad, but at their pricing, crazy. And 128GB is still better given the size of video downloads nowadays.
(eg. compress a BluRay/DVD down to a common MP4 rip and you'd still wind up with about a 1.5GB file. You can imagine how quickly space will disappear on smaller capacity drives....)
6) Pricing vs. eBook reader.
If I wanted an eBook reader, the SmartQ V7 would be half the price, more portable, and I'd still be able to read all of the txt, PDF, etc. ebooks I get today. The weight and size of the iPad is huge, can't be pocketed in a jacket pocket, and is just in that awkward size spot where it's too small to be a real comfy video viewer (15-17+" better) for long periods, too big for a truly portable pocket eBook reader.
7) Weight.
Start hefting 1.5lbs around as you read books, and you'll soon know why people also don't go hefting around a Canon Rebel XS + Lens (1lbs for the camera, about 1/2lbs for a zoom lens) as much as they do P&S cameras.
Again, at that spot where it's just it's a bit too pudgy for an eBook reader.
8) HTC HD2 Touch.
If you haven't seen what T-Mobile has unleased this month, you haven't seen the latest in powerful cell phones with big displays.
High-resolution movies on a nice screen? Yep.
Web? Yep.
Basic Office apps? Yep.
Cellular+Wifi? Yep.
eBooks? Yep.
Music? Yep.
And add Camera/Camcorder, microsd slot, radio, teathering, and a