Sunday, March 18, 2012

New iPad costs more to make, but Apple eats the difference

Apple's new iPad model with 32GB and 4G costs 9 percent more than a similar iPad 2, but the increase isn't passed on to consumers.

Apple is taking a hit for new iPad customers. That's because the company's bill of materials to make the next generation slates has apparently gone up, but the retail price has not.

According to an initial tear-down analysis by IHS iSuppli, the cost of parts found in the new iPad with 32GB of storage and 4G capability is 9 percent higher than that of an iPad 2 with a 3G radio. The report says the midrange new iPad costs Apple $364 for the parts, plus another $11 or so to assemble, for a grand total of $375, or just over 50 percent of the retail price of $729.

Not surprisingly, anticipated new features like Apple's retina display, 4G LTE, and a larger battery seem to be to blame for the increase in the bill of materials for the new iPad.

The lion's share of the pay-out from Apple for new iPad parts appears to be going to Samsung, which IHS believes sells the retina displays for $87 a piece to Apple, much more than the $57 screens for the iPad 2. Samsung also makes the applications processor in the new iPad and might also produce the battery cells. If this is the case, it would mean that half the bill of materials for each new iPad can be traced back to Samsung.

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View the original article here

Source From CNET

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