A recent report from BroadPoint AmTech analyst Brian Marshal suggests that Apple is going to be making more than $200 for every iPad they are able to sell. The range of profit appears to range from $208 on the $499 model and up to $446 on the $829 model.
“According to a bill of materials (BOM) analysis by Brian Marshall of BroadPoint AmTech, the cost of goods inside Apple’s 16GB Wi-Fi-only iPad totals $270.50. That figure includes a $10 line item dedicated to manufacturing, but doesn’t include another $20 set aside for under-warranty service costs. Adding the latter makes Marshall’s bottom-line total $290.50.”
Also interesting to note, but not surprising is that the display was the most expensive part on the list, coming in at $100. That however can be off-set by the lower price of the Apple A4 chip which was noted as being just $15. Other prices include the 16GB of memory and the aluminum casing both of which were $25 each.
This means the profit margin for the 16GB Wi-Fi only iPad is roughly 42.9%.
In terms of the 16GB Wi-Fi + 3G model, based on the same estimates that model is only costing Apple an extra $16 to make which means they will be making a higher profit on the +3G models. On the 16GB Wi-Fi + 3G model it was noted that the profit margin jumped up to 52%.
[via Computer World]
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February 2nd, 2010 at 8:58 pm
Wow. Apple's really got us over the barrel here. 52% profit margin?! That's a nice message to send to the consumer…"Sure we could make it more affordable while still remaining incredibly profitable…but Bill needs to make the payments on the new yacht he just bought…"
February 3rd, 2010 at 5:14 am
Wait until they drop the price shortly after launch. Apple is going to get a really bad name for this strategy….
February 3rd, 2010 at 7:58 am
The cost of the parts does not equal the whole cost to Apple – there are transport costs, dev costs, manufacturing costs, not sure what else but probably a few more costs! I doubt the profit margin will be as high as suggested though
February 3rd, 2010 at 2:20 pm
The real money will be made on the Apps and eBooks …….
February 4th, 2010 at 8:02 am
I agree with Tom, There is Licence cost, labor expense, R&D expense, electric cost, rent expense for using the building to manufacture, Steve jobs wage, etc
February 10th, 2010 at 1:57 pm
That profit margin is just for starters though. What about the hundreds of pounds worth of apps that the average iPhone user has? I agree that there are R+D costs etc, but even if these run into hundreds of thousands of dollars, it won't take many sales to recoup that and – boom. 52% profit margin again.
May 31st, 2010 at 11:28 pm
i agree with john.. the real money comes from the apps and ebooks…. for every user they will probably download more than a few apps and all they have to keep doing is bringing out even more apps every now and again and there you go…. more money = profit
June 8th, 2010 at 9:39 am
Its not surprising that they make such a huge profit with those margins, they could reduce the price to the end user while paying more to the companies making them instead of a pathetic amount and still make a shed load of money…but we all know they never would.
July 2nd, 2010 at 8:34 am
More than 50% profit. We do know that Apple is know for there innovative gadgets but this too much.