New iPad Production Cost is at $375.10

Wondering how much does Apple make for every unit of the new iPad sold? It’s not much, according to a detailed teardown analysis by IHS iSuppli.

New iPad

The teardown revealed that Apple just gets by, profit-wise, with its third-generation tablet sold at $499 or more, given that the total cost of production is at the very least, $375.10. From this total cost, we take out the bill of materials which is about $364.35 for the 32-gigabyte 4G LTE-capable iPad, and the manufacture cost which is at $10.75.

The total production cost is more than half of the retail price of the said version, which is at $729.00. The teardown does not include anything beyond hardware, like software and licensing fees.

What makes the new iPad’s hardware more costly?  For one, the super retina display is 53 percent more costly ($87 screen) than the previous generations’ screen costs. Also, the baseband processor for the 4G LTE capability is expensive, accounting for 11.4 percent of the new iPad’s bill of materials.

via VentureBeat

Filed Under: Apple iPad
  • Ash Anderson

    I’m not sure how the author comes to the conclusion that an almost 50% margin on the device is “not much” or “just get[ting] by.” Many companies can only dream of such high margins.

  • SethK

    Did you read the article? This doesn’t include licensing, labor, or development costs. Build this in America with union labor and they’d sell like three-day old fish.

  • Ash Anderson

    Which is precisely why the device is manufactured overseas.  $10.75 is actually also listed in the IHS report as the cost for labor. 

  • Benjordan03

    Apple would have to pay about 5 times more for wages in the US.  So if they sold the iPad for $560 they would make the same profit and we would have many more American jobs.  It is the right thing for an American company to do.

  • Benjordan03

     not to mention they are on track to sell 8 million this quarter.  $125 bucks times 8 million is a large chunk of cash to add to their 97 billion they have already accrued.  I’m sick of hearing that these companies “can’t afford” to make things in America.  It’s disgusting.

  • professerclever

    And so the New iPad has an A4 Processor! I have been misled that it had an A5X. A bit strange wouldn’t you say? Unless you decided to save money and not open up the most recent model of course.

  • Roland Hutchinson

     Hi professorclever

    It looks like Glenn used a photo of the old one instead of the new one, it has now been updated.