Apple rakes in $200-$400 profit for each iPad sold?

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Apple rakes in $200-$400 profit for each iPad sold?
An analyst named Brian Marshall, who works for BroadPoint AmTech, has just completed a report on the Apple iPad. Based on the cost of components, manufacturing costs and warranty repair costs, the entry-level $499 model produces $208 in profit for Apple while the top of the line $829 version more than doubles the profit to $446 per unit sold. Marshall wrote that the 16GB Wi-Fi model costs $270.50 to produce and $20 is the cost to Apple of the warranty. The biggest expense is the 9.7 inch touchscreen which costs $100 according to the analysts estimate. Apple does save a ton of money by using its own in-house A4 1GHz chip which costs about $15 for each one. For Apple, the profit margin on the $499 model is a healthy 42.9%; the other versions of the iPad in the line produce margins of 48% to as much as 55%.

Assuming that the lower cost Wi-Fi only models sell more than the Wi-Fi/3G versions, the entire iPad line should produce a 50% profit margin for Apple. Computerworld points out that these numbers-while they sound high-are perfectly in line with other Apple products. For example. some analysts estimate that the profit margin on the iPhone 3GS is north of 60%. And these numbers can grow for Apple. Once manufacturing ramps up, the cost to produce the tablets will come down which will raise the profit margin until Apple starts dropping the price. But that is in the future. In the here and now, Apple is about to print a lot more money to add to its vault. You can almost imagine Steve Jobs jumping around in the vault, throwing big wads of cash in the air like Scrooge Mc Duck.

source: TheAppleBlog



1. me.

Posts: 28; Member since: Oct 10, 2009

I like Apple devices, quality, design, but that's low to add video on iphone in 3 years, when they could do it in 1st iphone. Now I need to keep carrying a netbook till they make enough money and decide that is time for a webcam on ipad.

2. JeffdaBeat unregistered

I guess this is the best way to keep your business always in the Black. Love them or Hate them, Apple has made their products the thing to buy for years now. Even when we don't have a lot of money to go around, they convince us we need their product to look like we have money that we may not have. There is quality behind those products, but still...I remember hearing the XBOX 360 and PS3 cost more than they are sold for, but both companies bank on it working with online game play...Apple has money in the bank... Speaking of that, what if Apple entered into the gaming market? They are all about consumer electronics so I don't see why that would be an impossibility. Plus, they could completely do away with CD's if they offered online downloads of the games to a 1TB hard drive. Hell, they could make money on external hard drives for people who fill those up. Plus, it can be the whole market place style they have on the iPhone. That way you have family games and extremely graphic games alike. Developers don't have to be part of a big studio to make a game if people want to buy it. ...I should patent this idea and sue like I'm Motorola if they take it lol.

3. dmberta

Posts: 25; Member since: Dec 30, 2009

Just to note Steam already does this type of service and their membership numbers have swolen lately.

4. dmberta

Posts: 25; Member since: Dec 30, 2009

Oh and I mean the gaming idea, though Apple could probably bank on its name to get popularity here.

6. ehaus81

Posts: 6; Member since: Feb 02, 2010

They kinda already are in the gaming business. They market the iPod touch as a gaming platform mostly. Just look at the commercials for it. Also, Apple already tried to get into the game console market years ago. It was called the Pippin and it failed miserably.

5. DontHateOnS60

Posts: 872; Member since: Apr 20, 2009

I really hope someone else, like say Dell, or hell, even Nokia, comes to market with a very similiar product, with more features, but for less money, hopefully starting a price war that will dig into everybody's profits so we the consumers ultimately benefit.

7. remixfa

Posts: 14605; Member since: Dec 19, 2008

umm, there are plenty of other touch pad computers out there. Windows has had them for a while. This is nothing revoultionary, infact its quite behind if u think of all the lacking features (reminds me of a certain phone that took 3 iterations to get video and cut n you want bang for your buck? Go get an android based touchpad. Much cheaper, more features, and more hardware.

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