Apple Making Less Off New iPad

Mar 20, 2012

According to market research firm iSuppli Corp., owned by IHS, Inc., Apple may not be profiting as greatly off the sale of each new iPad. The news has been reported on by the Associated Press. iSuppli took apart the third-generation tablet and it appears Apple is making it with more expensive parts than those of the iPad 2, which launched a year ago. The new iPad vends for the same $499 price tag as the iPad 2 had at launch.

iSuppli said a new iPad with 32 GB of RAM and a cellular modem, which costs consumers $729, costs $364.35 to manufacture. That's a 9% increase over the $335 it cost to make the iPad 2 at its launch. The original iPad cost about $276 to make in 2010, according to iSuppli's estimate.

The 16 GB, Wi-Fi-only iPad sells for $499; it costs about $316 to make, about 63% of retail price. The 4G-ready 64 GB model that sells for $829 costs about $409 to make, or about 49% of retail price. The new cost figures represent an increase of between 21% and 25%, depending on the model, from the iPad 2. iSuppli also estimates the new iPad's higher-resolution display costs Apple $87, plus $40 for the touch-sensitive layer.