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Thread: Apple's Cost for $499 iPad? $270
01-30-2010, 11:01 AM #1
Apple's Cost for $499 iPad? $270
A $499 16GB iPad costs Apple $270.50 US to manufacture, according to an estimate by industry analysts Broadpoint Amtech, resulting in a profit of $228 for each one the company sells. For the top-of-the-line 64GB model, the profit goes up to $446. Large profit margins are common for Apple, with many analysts estimating that it makes 60% profit on each iPhone 3GS sold. Given that the original iPhone sold for $599, though, some observers believe that the low cost may make it possible for Apple to drop prices in the future to boost sales.
Broadpoint Amtech's Brian Marshall did an analysis of the Bill of Materials (BOM) of the various parts that go into the iPad. The single most expensive component was the 9.7-in. IPS LCD touchscreen, which Marshall estimates costs Apple $100. The 16GB of NAND memory in the low-end unit costs $25 each, he believes, and the battery costs $30. The Apple A4 chip, manufactured by Samsung to Apple's specifications, costs $15. The list doesn't include the cost of warranty service, which Marshall estimates will add another $20 to the overall bill.
Ezra Gottheil, an analyst with Technology Business Research, opined that the large margins gives Apple room to play with price.
If [Marshall] is right, this shows that there's room going forward for Apple to reduce the price of the iPad. I think the $499 price point is very aggressive, but if they dropped [the price] it would really put the iPad in the netbook range. At a lower price, consumers will have to decide what they want for a portable work and play device, a netbook or get an iPad.
Apple has not yet released pricing for iPad units that will be sold outside the United States. "We hope to have our international deals in place in [the] June/July time[frame] - we’re starting on that tomorrow," Steve Jobs said on Wednesday of last week.
image via The Guardian
Last edited by Paul Daniel Ash; 01-30-2010 at 11:05 AM.
01-30-2010, 11:04 AM #2
Good for them. Glad they are making a decent profit margin on it
01-30-2010, 11:17 AM #3
horray for lower priced iPads!
01-30-2010, 11:30 AM #4
With that much of a profit margin why can't they include the basic functionality of a netbook so that the web is usable. Put freaking flash on it!!!!! Do that and I'll buy it.
01-30-2010, 11:33 AM #5
Wow that's kinda annoying especially for those of us who are low on cash.
01-30-2010, 11:37 AM #6
Wifi to 3G $130 upgrade for $16 dollars worth of product. What a douche. Douche, iPad I think there is a theme here.
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01-30-2010, 11:38 AM #7That is just material and labor costs...
Think about all of the development and marketing that went into this device. They have been working on it for years. That is a hell of alot of manhours to account for. Apple pays there people very well to develop this technology. You can't just assume that anything above and beyond the labor and materials is profit...
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01-30-2010, 11:52 AM #8
They've made a profit out of every device. I don't know what the point of trashing their profit in these articles. I'm pretty sure the profit Bose, Sony, Monster Cable etc. are larger than these. This is what capitalism is all about; if you don't like it then let's all have socialist phones. Stop complaining about how much apple makes. They deserve it.If I helped you out, please use the Thanks button ------------------------->
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01-30-2010, 11:59 AM #9
I'm sure that the 3G price difference has something to do with the contract they created with apple for contract free data pricing.
01-30-2010, 12:02 PM #10
01-30-2010, 12:03 PM #11
It is OK for them to make a profit, but why they douche us with the "add ons" is incredible. E.g., whey I bought my mac pro (4 core 2 xeons), apple wanted $600 for upgrading the memory from 1GB to 4GB, newegg sold me 4 GB (additional to the 1GB already present) for only $150... Same thing with the HD, upgrading from 250 GB to 500 GB was an $250 add on; buying an *additional* 500 GB hd from newegg: $120 (and I got to keep BOTH HD's). This is apple... They charge you $100 to upgrade from 16GB to 32GB of storage when it costs them $15... BAD BAD BAD.
01-30-2010, 12:43 PM #12
01-30-2010, 12:47 PM #13
What you don't seem to understand is that you should want companies to make a profit. If they do not then they won't be in business for long (unless you are in the automotive or banking business ). So yes I am very happy for Apple and I think $499 is rather cheap.
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01-30-2010, 12:59 PM #14
I am glad to see apple making a profit meaning more money for the company and more people employed to provide for there family.
01-30-2010, 01:26 PM #15
01-30-2010, 02:09 PM #16
Hate to say it, but this is typical from Apple. The thing should be $299.
01-30-2010, 02:26 PM #17
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01-30-2010, 02:28 PM #18
lol. Honestly they are mostly 14-20. The age of arrogance and entitlement
Last edited by StealthBravo; 01-30-2010 at 02:49 PM.
01-30-2010, 02:51 PM #19
So Touch (299) + screen (80) - storage (25) = 354
I could maybe see $399 being a decent price for the low end Pad since it's nothing more than a big iPod Touch.
01-30-2010, 02:54 PM #20
lol apple knows business
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