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Thread: iPad Air Found to Be Cheaper to Produce Than Older iPad Models

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The iPad Air is Apple’s latest iPad, which sports a 64-bit A7 dual-core processor and a 9.7-inch LED-backlit retina display, all packed into Apple’s thinnest and lightest design for the
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    MMi Staff Writer Anthony Bouchard's Avatar
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    Default iPad Air Found to Be Cheaper to Produce Than Older iPad Models


    The iPad Air is Apple’s latest iPad, which sports a 64-bit A7 dual-core processor and a 9.7-inch LED-backlit retina display, all packed into Apple’s thinnest and lightest design for the iPad yet. But don't let this fool you – it's also Apple's fastest iPad yet.

    While the iPad may be the latest and greatest iPad yet, a research firm known as IHS claims that the iPad Air is also significantly cheaper for Apple to produce than previous versions of the iPad, reports AllThingsD.

    According to IHS, it only costs Apple anywhere between $274-361 to manufacture an iPad Air depending on the storage and wireless capabilities of the device. The retail price of the low-end Wi-Fi-only iPad Air starts at $499, while the high-end cellular-capable iPad Air ends at $929. So you can be sure that Apple is making a pretty penny per device.

    The iPad Air’s touch screen is one of the device’s most expensive parts in the manufacturing process, coming in at $133 per pop, where $90 of this is for the display alone without all of the touch screen technology. Notably, the iPad Air's display is thinner than previous versions of the iPad, and it now uses fewer LEDs to light up the display (36 now instead of 84), which helps Apple in the factors of power efficiency and cost. The iPad Air's 64-bit A7 chip costs Apple around $18 to produce.

    AllThingsD notes that the iPad Air is $42 cheaper for Apple to produce than the third-generation iPad with retina display.

    Recently, iFixit tore down the iPad Air showing all of the device's insides and gave the device a 2 out of 10 repairability score.

    Sources: AllThingsD
    Last edited by Anthony Bouchard; 11-05-2013 at 08:37 AM.

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    And people claim Apple is way overpriced. Maybe on the higher end models, but for the base model I would say they are pretty close to breaking even when you factor in R&D, labor, building up production lines, shipping and all other overhead costs these estimates don't include.

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    Quote Originally Posted by fleurya View Post
    And people claim Apple is way overpriced. Maybe on the higher end models, but for the base model I would say they are pretty close to breaking even when you factor in R&D, labor, building up production lines, shipping and all other overhead costs these estimates don't include.
    I'm going to have to disagree. Firstly, they're in business for profit, not breaking even. According to Michael Essany's article found at Apple's R&D Costs Have Spiked This Year, Apple's R & D has spiked this year at $4.5 Billion. Dividing that by the smallest profit margin-the 16 GB wifi ipad air-would leave you with a break even point of 20,000,000 units sold. Considering last year's Q3 sales were 15 million and sales to date are about 170 million, 20 mil shouldn't take too long.

    Now, this doesn't take into account the additional expenditures you mentioned, but it does cover ALL Apple's R & D for the year, which actually cover many other products. I'd guess the ipad R & D to be around 20% (swag). That said, they're making boatloads of money on the ipad alone.

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