AAPL Stock: 117.81 ( -0.22 )

Printed from

New 4G iPad seen costing $310 to make, lowering margins

updated 07:45 am EST, Fri March 9, 2012

UBM sees Apple making less on new iPad

A UBM TechInsights preliminary breakdown of the new iPad's costs has suggested Apple is at least taking a slight price hit to build it. It believed that a 16GB, iPad 4G model cost about $310 in raw components. While it represented a 51 percent margin over the $629 price before many other factors came into play, it was significantly less than an equivalent 3G iPad 2's 56 percent margin when it was new in 2011.

Most of the cost would be in the 2048x1536 display. At $70, it would be noticeably more expensive than the $49.50 of the older 1024x768 screen. Apple's near-universal LTE chipset might cost it $21 versus the $10 for a 3G chip in the earlier tablet. An A5X chip was given a rough estimate of $28 versus $22 for an A5.

Costs are likely to change at least slightly once groups such as UBM can directly analyze components, although they typically come relatively close. Apple could have a wider margin if it succeeds in getting better deals for the processor, 4G chipset, or other parts.

As always, the raw margin over components excludes several factors that lead to a considerably lower margin. The UBM figures don't include assembly, shipping, marketing, or the research and development that can be attributed to each iPad. Apple is still expected to have a relatively large profit margin, although it's this that has often been credited to its ability to aggressively develop new models and make some of the best profits in the industry.

by MacNN Staff



  1. Jeronimo2000

    Joined: Dec 1969


    Not sure this is correct

    Or did these "UBM TechInsights" people have access to the details of the deals Apple negotiated with the parts' suppliers?

Login Here

Not a member of the MacNN forums? Register now for free.


Network Headlines

Follow us on Facebook


Most Popular


Recent Reviews

Ultimate Ears Megaboom Bluetooth Speaker

Ultimate Ears (now owned by Logitech) has found great success in the marketplace with its "Boom" series of Bluetooth speakers, a mod ...

Kinivo URBN Premium Bluetooth Headphones

We love music, and we're willing to bet that you do, too. If you're like us, you probably spend a good portion of your time wearing ...

Jamstik+ MIDI Controller

For a long time the MIDI world has been dominated by keyboard-inspired controllers. Times are changing however, and we are slowly star ...


Most Commented