Apple started shipping the New iPad on March 16. The device itself was unveiled to public on March 7 at the Yerba Buena Center for the Arts in San Francisco, California. Despite the disappointment over the fact that this iPad looks exactly like it’s predecessor, demand for New iPad has been off the charts. Which means that Apple will sell millions of units around the world without any issues whatsoever. Have you ever wondered how much does it actually cost Apple to build one unit of this magical tablet? That would be $316 precisely.
As mentioned above, the New iPad is structurally no different than the iPad 2. It’s a bit heavier and a tiny bit thicker, that’s just about it in the design change department. However Apple has made significant improvements under the hood. The New iPad boasts a powerful dualcore A5X processor, 1GB of RAM, a quadcore graphics chip, a gorgeous Retina Display, 4G LTE support and a 5 megapixel iSight camera.
The base iPad model has always been a 16GB Wi-Fi only one. Ever since it was first launched in 2010, the base model has always been priced at $499. Apple has retained previous price points this time around as well, however their bill of materials has significantly increased due to technological improvements in the New iPad.
IHS iSuppli, a market research firm, tore down a New iPad as soon as they got their hands on it. They have discovered that previous component suppliers such as Qualcomm and Broadcom supply vital components for the third generation iPad as well. Their teardown reveals that the 16GB Wi-Fi only New iPad costs Apple $316 to build. The amazing Retina Display accounts for more than a quarter of this figure, as the Samsung supplied display costs $87 a piece. By retailing this particular iPad model at $499, Apple makes a profit of about 37% per unit. Naturally, as sales go up, so does the profit.
On the other hand, the top of the line 64GB 4G LTE iPad model leaves a greater margin for profit. It costs Apple $409 to build one unit, whereas it is retailed for $829. The 4G LTE chip is this variant happens to be cheaper than the display, which is the most expensive component in the New iPad. For sake of comparison, do remember that the display on iPad 2 cost $57. Apple would obviously wish that the 64GB 4G LTE model becomes the most sold variant, as it leaves behind room for a profit of approximately 51% per unit. However that is certainly not the case.
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Source : Google Reader
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