Apple pays just a dollar more to manufacture a single iPad Air 2

Apple pays just a dollar more to manufacture a single iPad Air 2
We're not going to be passing any judgements here, we're just going to state some facts as reported by research house IHS. According to the analysts, the 16GB Wi-Fi only base model of the iPad Air 2 costs $275 per unit to manufacture, which is a whopping one dollar more than what the former iPad Air's base model manufacturing costs. This effectively means that, research and development costs aside, Apple spent a single dollar improving the technology inside the tablet. 

The base model's market price is $499, while the top of the line iPad Air 2 with 128GB of storage space and LTE connectivity costs $358 to make, and sells for $829. IHS claims that Apple's implied profit margin on the iPad Air 2 has dropped to a range between 45 to 57 percent as opposed to the original's 45 to 61 percent profit, depending on the device sold.

IHS's breakdown states that the Samsung & LG-made display remains the iPad's most expensive component, at $77 per unit. Meanwhie, the main camera is essentially the same as the one in the iPhone 6 and iPhone 6 Plus, although it lacks the latter's image stabilization features. It costs just $11 to outfit the iPad Air 2 with a pair of front and back cameras, whose supplier is unknown. Apple spends about $9.20 on the 16GB of storage space found in the tablet's base model, but the cost can jump to $60 for the 128GB model. The alleged memory suppliers are SK Hynix, Toshiba, and SanDisk.

Related phones

iPad Air 2
  • Display 9.7" 1536 x 2048 pixels
  • Camera 8 MP / 1.2 MP front
  • Processor Apple A8X, Triple-core, 1500 MHz
  • Storage 128 GB
  • Battery 7340 mAh

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31 Comments

1. darkkjedii

Posts: 31280; Member since: Feb 05, 2011

I want one.

6. ArtSim98

Posts: 3535; Member since: Dec 21, 2012

I don't.

9. Finalflash

Posts: 4063; Member since: Jul 23, 2013

Agreed, Nexus 9 all the way.

12. remixfa

Posts: 14605; Member since: Dec 19, 2008

phablets are making tablets near pointless unless you do a massive amount of travel/media consumption. But if I had to choose, I'd definitely get another Nexus tablet.

13. Finalflash

Posts: 4063; Member since: Jul 23, 2013

Thing is most people don't want phablets because on an everyday level they might be too cumbersome. I prefer a smaller phone size around 4.5 ideally with 5 being maximum. This leaves a space for tablets in between my 17 inch laptop and phone. I don't constantly want a massive phone though just so I can cover both a tablet and phone.

18. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Well sales numbers prove otherwise. When large phones acame out and Apple claimed no one would buy them, the very first year in 2009/10, 25% of the phones sold were above 4". Then the following year, 2011/12, more than 50% of the phones sold above 4" and then the next years 75" of the phone that sold were of that size or larger. That is why Apple jumped in because Samsung who created the larger phone category was taking off fast and Apple needed a quick 2 year outdated catchup. In such a rush they made the cheapest phone ever that bends like taffy.

19. ManusImperceptus

Posts: 724; Member since: Jun 10, 2014

Have you actually tried one for an extended period of time? I used to feel the same way, but necessity "forced" me to buy a 6" Lumia 1520, and now I'm not certain I would "downgrade" to an eventual 5" Lumia 1030... It's THAT addictive with a large display!

26. remixfa

Posts: 14605; Member since: Dec 19, 2008

Im one of those. I love the size of my N4. I dont really want to go much bigger (theres still plenty of room to increase screen size and shrink bezels), but I have no choice in the matter unless I want to be relegated to mid range no-update madness.... which isnt going to happen. lol.

21. UglyFrank

Posts: 2194; Member since: Jan 23, 2014

i'm an android man but have a iPad Air because I was given it as part of my course, the iPad does bore me and I would like a android tablet, however besides the Tegra K1 tabs, no android tabs come closer to the power of the iPad Air 2.

24. LebronJamesFanboy

Posts: 671; Member since: Mar 23, 2013

I have one. It's f**king amazing.

30. laughmi

Posts: 283; Member since: Oct 28, 2014

In most of your replies Iv observed it seems you have all the Apple phones tablets (my ipad mini, mini2, ipad1,2,3,4 ipad air,all iphones) and you also demand you want the latest models whatever it is. I seriously doubt you're being paid by Apple for trolling over internet sites. Isn't it s*** to spend whole life trolling and spamming over sites like phonearena.com?

2. techspace

Posts: 1037; Member since: Sep 03, 2012

No one was expecting it to cost more than that.

3. Iodine

Posts: 1493; Member since: Jun 19, 2014

The camera is far from being "esentially the same as on the iPhone 6".

4. darkkjedii

Posts: 31280; Member since: Feb 05, 2011

Very far

8. Finalflash

Posts: 4063; Member since: Jul 23, 2013

Yet ...... it is.

11. darkkjedii

Posts: 31280; Member since: Feb 05, 2011

Iodine, the sheer beauty, specs, and that Eco system are calling my name.

20. ManusImperceptus

Posts: 724; Member since: Jun 10, 2014

Ugly and mediocre specs are calling your name...?

25. AppleJuice

Posts: 145; Member since: Sep 12, 2013

Mediocre specs that still performs better than any other android tablet? That comment was a joke.

5. itsmekalyan

Posts: 16; Member since: Nov 22, 2012

i am not a big iOS guy but you are saying apple put finger print sensor made it thinner, faster and lot more for only 1$ more than ipad air. then this is a tablet ios fans need to buy

7. Rydsmith unregistered

Going to sit here and watch the significant amount of people that don't understand R&D costs, marketing, labor, overhead, etc.... In fact the BoM is typically the lowest of all costs for a product.

10. androtaku

Posts: 246; Member since: Dec 12, 2013

And all haters are dumb enough to not think about cost of risk,and risk premium all businesses have to consider in every product decision

27. willard12 unregistered

...because no other company does R & D or has Chinese labor?

14. razraptre

Posts: 168; Member since: Oct 21, 2014

While I will say that iSheep are iSheep, especially here in countries where Apple's products are like a month's salary for most people, you gotta admire their marketing. I mean DAMN, that profit margin? And DAMN, they still get people to buy it? They truly have some business game.

15. techspace

Posts: 1037; Member since: Sep 03, 2012

Many iPhone(and other apple product) users in the low income countries consider it to be their status symbol.

16. juandante

Posts: 679; Member since: Apr 23, 2013

You can't really say this, you must consider a lot of other factors like R&D and marketing

32. razraptre

Posts: 168; Member since: Oct 21, 2014

Which also holds true for other devices. And when it comes to innovation, you have to admit that Apple isn't exactly a trailblazer compared to other manufacturers like Samsung or even Nokia. The pricing, product and the packaging are all crafted very carefully in order to maximize profit.

22. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Well, there's a sucker born everyday.

17. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Yet jacked it up $100. I bet it only costs them $1.00 more to make the new iPhones, yet they jacked them up $100 more and they bend like taffy. That's why they have such a high margin of profit. They don't spend a lot of money as they don't have to pay as much as a real OEM who makes their own stuff on things like distribution, manufacturing and actual R&D. They pay outsiders to do almost everything which is far cheaper than doing it yourself.

23. LebronJamesFanboy

Posts: 671; Member since: Mar 23, 2013

I'd be embarrassed if I were you right now. It's clear that you don't understand the concept of economies of scale.

28. willard12 unregistered

These teardown articles are based on estimated costs of components and not the price at which Apple obtained them. If you apply economies of scale, the Ipad probably costs a lot less than $272. IHS has no clue of how much Apple paid Samsung and LG, as that is a tightly held secret. IHS doesn't even know who the manufacturers are of the flash memory, yet alone how much Apple paid "x" company to deliver them on a large scale. However, they do know how much the components should cost per individaul device. And if you figure Apple got the discount for ordering in bulk, then the cost is actually lower than the teardown estimate. Please tell everyone of lesser intelligence than you why this assessment is wrong. But, it seems they are really looking at the value of the device based on an analysis of the hardware's capabilities and not Apple's actual cost to buy them.

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