No Surprise: Apple Making A Boatload Of Money On Each iPad 2 Sold
March 14, 2011
Price tags for the iPad 2 start at $499 for consumers, but what does Apple actually make on each unit? We’ve got the answer, courtesy of market research firm IHS iSuppli, who took apart one iPad 2 and examined its parts. This news was first reported by All Things Digital.
The infamous product teardown is part of the tradition that soon follows an Apple product release. While knowing what a product actually costs is good fun for consumers, it is actually very important to the market overall. By estimating what Apple makes on each unit, Wall Street and the investment community in general can project what future Apple earnings might look like.
In this teardown, iSuppli took apart a 32GB WiFi + 3G iPad 2 model.
The total cost of materials was determined to be $323.35 for the Verizon 3G model versus $326.60 for each unit produced for AT&T. The difference in price between versions is because each uses a slightly different wireless component.
It is estimated that the highest cost component on the iPad 2 is the LG-produced LCD panel, which costs $127. Other costs include: $14 for Apple’s new A5 chip, and $65.70 for the flash and DRAM memory chips.
The iPad 2 model used by iSuppli retails for $729.
Keep in mind, these numbers don’t include other costs such as product development, packaging and shipping, and manufacturing, among others.
Still, this is a good starting point in determining how much richer Apple will get in the coming months.