iPad teardown: Apple makes at least $208 on each unit

Robert Clark
02 Feb 2010
00:00

Apple is set to make at least $208 on each new iPad sold, according to a teardown of the new tablet device.

An analysis by US investment firm BroadPoint AmTech estimates that the entry-level $499 model would generate a $208 margin, while the high-end $829 model would earn $446 per unit.

The teardown is based on the going rate for component parts, manufacturing cost and built-in warranty repair costs, Computerworldsaid

The 16GB Wi-Fi iPad would cost around $270.50 to manufacture, plus $20 for warranty costs for a total of $290.50, BroadPoint AmTech said. The most expensive component is the 9.7-inch touchscreen display, which costs around $100. The 16GB of memory and the aluminum case cost about $25 each, while the Apple A4 chip was listed at $15.

Apple’s in-house A4 chips cost around $15 per unit. With a cost of $290.50 and a selling price of $499, Apple’s profit margin will be 42.9% on each sale of the low-end device. On other models, that margin ranges from 48% to 55.1%, giving the iPad line as a whole a margin of around 50%.

An iPad that can connect to the Internet via 3G data network is even more profitable, Computerworld said. Apple adds a $130 surcharge for those tablets but with a very small hardware cost.

The $629 16GB iPad with Wi-Fi and 3G costs Apple $306.50, just $16 more than the Wi-Fi-only model, giving the company a profit margin of 52%, a jump of nine percentage points.

“High profit margins are standard for Apple, which earlier in the week boasted that its corporate margin for 2009's final quarter was 40.1%,” the magazine said, noting that the margin on the iPhone 3GS was 60% - higher than the estimated iPad profit margin.

Related content

Comments
No Comments Yet! Be the first to share what you think!

This website uses cookies

This provides customers with a personalized experience and increases the efficiency of visiting the site, allowing us to provide the most efficient service. By using the website and accepting the terms of the policy, you consent to the use of cookies in accordance with the terms of this policy.