iPad

Larger iPads put more money in Apple's pockets

2012 iPad hardware cost breakdown reveals that Apple charges a hefty premium for the 32GB and 64GB models.

iPad buyers who opt for the 32GB and 64GB models are paying a premium for all that space.

IHS iSuppli, a hardware research and market analysis firm, performed a cost breakdown of the components inside the 2012 iPad. According to their teardown, the 3rd generation iPad (Wi-Fi, 16GB) has a $306.05 bill of materials (BOM) and costs $10 to manufacture. Not surprisingly, the new iPad's Retina display is the most expensive component at $87. Other big-ticket items include the A5X SoC at $23, the Gorilla Glass touchscreen at $40, the iPad's 1GB of DRAM at $13.90, the cameras at $12.35, and the 43Whr Li-ion battery at $32.

Then there's the iPad's storage module. According to IHS iSuppli, the base-model iPad's 16GB of NAND Flash memory costs just $16.80. Each subsequent 16GB chunk of storage adds another $16.80 to the iPad's price tag. Therefore, the mid-level iPad's 32GB of storage costs $33.60 and the top-end model's 64GB costs $67.20.

Given that buyers pay an additional $100 for the 32GB iPad and $200 for the 64GB version, Apple makes a hefty profit on the 32GB and 64GB iPads' additional storage (see Table 1).

About

Bill Detwiler is Managing Editor of TechRepublic and Tech Pro Research and the host of Cracking Open, CNET and TechRepublic's popular online show. Prior to joining TechRepublic in 2000, Bill was an IT manager, database administrator, and desktop supp...

8 comments
J3
J3

With only a few tweaks and additions here and there I knew that Apple's profit margin would go up nicely as most of the components are the same from the iPad 2. It would be interesting to see this broken down for the iPhone 4s. I'm sure Apple also had a nice profit margin increase with that product.

BillGates_z
BillGates_z

No Duh Einstein. And no expansion slot either. Thanks Steve! What's that, you say it's hot? You want some iced water?

WLaddR
WLaddR

The Sony S, the ASUS Slider and EEE, the Samsung Tab and the Blackberry tablets all cost $100 to go from 16G to 32G. Blackbery is $100 for 32 to 64G. Toshiba tablets are in the $70-80 range for 16->32G upgrade. But they're all just following Apple's lead, right? Still trying to catch up?

clozano
clozano

I know Apple is making more money than Microsoft and anybody else, They have great products, but they also make money out of the app and music stores. Hopefully Apple will copy the model of Amazon and lower their prices and not the Microsoft path which they are trying to change kind of late.

thegreenwizard1
thegreenwizard1

Every body knows that Apple over charges their customers. If they want to be cook with Apple's sauce, that's their choice.

Gisabun
Gisabun

I said this maybe last week when the new iPad came out. the cost of flash memory is cheap. So why does Apple gouge their customers. Outside of the memory, there is no difference between models. On top of that, [from a different blog - maybe a different sire] the OS iktself has increased in size with some applications taking up more than double the space of the iPad 2 OS version. It almost makes sense not to get the 16GB version.

Bill Detwiler
Bill Detwiler

I was really disappointed that Apple chose not to increase the base model iPad's storage from 16GB to 32GB. Given the price of the NAND flash modules, they certainly could have.