The iPad Air is thinner and lighter than any iPad that has come before it, but lower production costs than previous models will help to keep Apple’s pocket’s heavy. Research firm IHS tore apart the latest tablet out of Cupertino and calculated exactly how much Apple spends per unit. The result was surprising.
Despite being technologically superior to older iPads (the Air features a faster A7 chip and advanced display assembly), the WiFi-only 16GB iPad Air costs Apple $274, or $42 less than the third-gen iPad to produce (the last model IHS conducted a similar study with). The reason? Aside from the aforementioned changes, the iPad has used a relatively similar component set over the past few release cycles.
The display assembly is the biggest cost in producing the iPad Air at a combined $133. New technologies in this area are part of how Apple was able to shave down the overall size of their latest tablet, but they come at a higher cost than the equivalent parts on older iPad models. The 64-bit A7 chip, however, actually costs $5 less at $18 than the A5 in the third-generation iPad.
The base model iPad Air retails for $499. Moving up the pricing tiers, the only additional costs for Apple come from adding a cellular chip to the production and increasing the size of available onboard storage. These costs become marginal compared to the maxed out $929 price tag of a 128GB model with cellular radios built in. The cost for Apple to produce the same? Only $361, or less than $100 more than the base model.
[via AllThingsD]
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