UBM TechInsights already has a preliminary breakdown of the new iPad’s component costs. It suggests that the 16GB model with 4G costs Apple about $310 to construct, which leads to a 51 percent margin on the $629 selling price. This is a decrease from the 56 percent margin the 3G-capable iPad 2 had when it was announced back in 2011. These are the raw margin figures, and don’t include things like research & development, marketing, assembly, or shipping.
Most of the cost increase can be attributed to the new Retina display, which costs $70 compared to the iPad 2’s $49.50 display. The A5X chip counts for $28 of the cost, up from the $22 cost of the A5 chip. The universal LTE/3G chipset runs for about $21 as opposed to the older $10 3G chip. It’s also safe to assume that the healthy increase in battery capacity contributes to the increased cost as well.
Of course, Apple could certainly have procured better deals with manufacturers, leading to lower prices than the speculation presumes. A hands-on analysis of the components will help determine exactly how close UTM’s breakdown is.
