Components for 4G LTE iPad estimated to cost $310, netting Apple 51% marginsApple's third-generation iPad will have a slightly lower hardware-based profit margin of about 51 percent, based on a new estimate of hardware costs.
The analysis from UBM TechInsights suggests that a 16-gigabyte iPad with 4G LTE connectivity costs $310 in components, up from $270.86 for the original iPad, and $276.27 for the iPad 2 at their respective launches. That would mean that Apple's profit margins have been reduced from about 57 percent on its first two iPad models to 51 percent on the latest-generation tablet.
The most expensive component on the third-generation iPad is believed to be its high-resolution Retina Display. UBM has estimated that the display costs $70, followed by $30 for the battery and $25 for the touchscreen.
Other major component costs are estimated at $12.50 for the camera, $16 for NAND flash storage, $28 for the custom A5X processor, $8.50 for the SDRAM, and $7 for the Wi-Fi, Bluetooth and GPS radios.
The battery, in particular, has grown significantly from the iPad 2, as the latest model sports a capacity of 11,180 mAh, compared to 6,580 mAh for last year's model. The new iPad also has double the RAM of its predecessor, with 1 gigabyte, and has added high-speed LTE 4G wireless connectivity.
"The bottom line is the new iPad's margin should take a little hit because of some of the expensive adders like LTE, the high-res display and camera, a bigger battery and faster processor," said Jeff Brown, senior analyst at UBM TechInsights.
As for the 16-gigabyte iPad 2, which Apple will continue to sell for $100 less, the bill of materials for the 3G model is estimated to be $248.07, a price lower than last year's launch because component prices have fallen over the last 12 months. If accurate, the estimate would peg margins on the iPad 2 at 53 percent.
On Topic: iPad
- Apple, Samsung, Facebook, Amazon & the case of the 'very bad' Q2
- Intel splits on Atom after the mobile relevance of x86 whacked by Apple's Ax
- Review: Logi Base Smart Connector charging dock is the best way to juice your iPad Pro
- Apple's iPad Pro beating Microsoft Surface in 'detachable' tablet market
- First look: Logi Base is the first device to charge your iPad Pro via Smart Connector