at $299 and up. At that price point, the Cupertino based firm will produce gross profit margins of 53% to 135% which actually is gross as far as Apple stockholders are concerned. Consider that the Apple iPhone 5 generates gross margins of 213% to 257%. It must be partly the device itself as the gross margins on the third iteration of the Apple iPad weigh in at 58% to 103%. It is interesting that back in August, another analyst crunched the numbers and came up with the same $299 prediction for the price tag on the Apple iPad mini.
The Apple iPad mini's screen is the most expensive part of the tablet, costing $56.50 for each one. Adding Gorilla Glass 2 to each screen runs the tab up $7 per device. A new technology called GF DITO allows the device to be made 18% thinner than the full sized model. The actual numbers are 7.6 mm for the iPad mini and 9.3mm for the third generation of the iPad. The mini's logic board costs $54 for the Wi-Fi version and $80 for the 4G LTE model. The processor, which costs $15 each, is a 32nm process Apple A5X with 512MB of RAM. Some other interesting costs include the $16.50 5MP camera, $4 front-facing shooter, $33 casing, $12 battery and $7 labor costs.
Amazon breaks even on its tablet sales and profits from content, app and cloud space to Amazon Kindle Fire owners. If Apple does price the iPad mini at $299 and up, will that $100 gap between the low priced 7 inch Android crowd and the Apple iPad mini be too much for even Apple to overcome? On the other hand, there are some who expect Apple to start the Pad mini as low as $249, a more reasonable price which would make it more competitive. We should know on Tuesday when two years of speculation comes to an end.