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It's amazing just how little Apple pays for memory on the new iPad Air 2

It's amazing just how little Apple pays for memory on the new iPad Air 2

October 28, 2014

The iPad Air 2 costs roughly the same to produce as the iPad Air. Apple’s profit margin on the new tablet has fallen, however, according to a new report from the research firm IHS.

As first noted by Re/Code, the new survey shows that the 16GB iPad Air 2 model costs $275 to build, while the top-end model, the 128GB LTE version, costs $358. The models are priced at $499 and $829, respectively.

Re/Code notes:

Apple’s implied profit margin on the iPad Air 2 has dropped slightly to a range of 45 percent to 57 percent depending on the device, compared with the original at 45 percent to 61 percent.

Not surprisingly, the most expensive item on the iPad Air 2 is its display, which costs $77 to produce. The display found on last year’s model costs $90.

How much profit is Apple making on memory? Plenty, according to IHS analyst Andrew Rassweiler, who says that Apple pays just $0.40 per gigabyte. This translates into about $9.20 on memory for the low-end 16GB devices, but as much as $60 for the higher-end 128GB devices. Apple charges $300 more for the 128GB model. “Apple reaps a pretty good profit for all that memory,” Rassweiler said.

We would agree.

The iPad Air 2 and iPad mini 3 are currently available in the United States, Australia, Austria, Belgium, Bulgaria, Canada, China (Wi-Fi models only), Czech Republic, Denmark, Finland, France, Germany, Hong Kong, Iceland, Ireland, Italy, Japan, Liechtenstein, Luxembourg, Macau (Wi-Fi models only), Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Singapore, Slovakia, Spain, Sweden, Switzerland, and the United Kingdom.

Availability in Croatia, Greece, Puerto Rico, Russia, Turkey, United Arab Emirates, and elsewhere around the world, will continue through the end of this month with additional global availability in the coming months.

See also: DisplayMate offers little praise for the iPad Air 2, calls the iPad mini 3 ‘embarrassingly mediocre,’ Apple SIM set to lose carrier flexibility once it’s used with AT&T, and First impressions of the iPad Air 2: Is it worth the upgrade?

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