3 ms·

I can't argue with that. But the pricing isn't surprising. Apple doesn't make that much money on the iPad, and they have an incredibly efficient supply chain.

I can't argue with that. But the pricing isn't surprising. Apple doesn't make that much money on the iPad, and they have an incredibly efficient supply chain. At the same quality level, it's hard for anyone to undercut apple on price on iPad, unless you do a 0-margin product (google, amazon). In contrast, iPhone has lots of margin, so it's relatively easy for other players.

pooriaazimi 14y ago
> Apple doesn't make that much money on the iPad Hmmm... I might be wrong, but I thought they have HUGE margins. You know, like 40%? Keep in mind that the most popular iPad, 32GB 4G is $729. The $499 model is not the most popular one (at least according to the analysts).
- WrkInProgress 14y ago
  Do you have a source for that ? For some reason I find that hard to believe: that the most expensive iPad is the most popular one as opposed to to the 16 GB WIFI only version.
  - pooriaazimi 14y ago
    I can't find the article now (stupid Google shows just ads and links to Amazon or Apple when I search for something like "iPad most popular model"), but here's one that claims 64GB 3G Model was the most popular iPad 2 model on launch: http://gigaom.com/apple/most-popular-ipad-2-model-is-also-the-most-expensive/ http://gigaom.com/apple/most-popular-ipad-2-model-is-also-th... Arguably, early adopters are different than "late"-adopters, but still... The "analysis" that I remember was for iPad 3, and it was a few months after the launch.
benlower 14y ago
Not sure what your definition of "that much money" is :-) The margins are estimated to be ~37% - ~50% depending on the model. http://www.isuppli.com/Teardowns/News/Pages/New-iPad-32-GB-4G-Carries-364-35-Bill-of-Materials.aspx http://www.isuppli.com/Teardowns/News/Pages/New-iPad-32-GB-4... Those estimated margins aren't as high as iPhone (http://www.isuppli.com/Teardowns/News/Pages/iPhone5-Carries-$199-BOM-Virtual-Teardown-Reveals.aspx http://www.isuppli.com/Teardowns/News/Pages/iPhone5-Carries-...) but are still pretty damn good :-)
- seanmcdirmid 14y ago
  Somewhere definitely north of 30%, 40% for high end devices. Keep in mind apple has its own retail distribution, so there is no middle cut (they offer very little to resellers like best buy). Apple has room to cut prices if they want, I don't think anyone else does though.
- nilsbunger 14y ago
  It's hard to run a hardware business at less than 35% gross margins. There are a lot of extra costs besides the bill of materials and assembly. 37% for apple might only be 25% for any other competitor, because apples supply chain is so streamlined and locked down. So it's hard to compete with the base iPad on price. At 50%, you are right, there could be room to undercut, but that's only the high-end iPad (eg 64gb) which isn't where the volume is. iPhone margins are much better, and thus leave more room for others to undercut or offer feature parity.

pooriaazimi 14y ago

> Apple doesn't make that much money on the iPad Hmmm... I might be wrong, but I thought they have HUGE margins. You know, like 40%? Keep in mind that the most popular iPad, 32GB 4G is $729. The $499 model is not the most popular one (at least according to the analysts).

WrkInProgress 14y ago
Do you have a source for that ? For some reason I find that hard to believe: that the most expensive iPad is the most popular one as opposed to to the 16 GB WIFI only version.
- pooriaazimi 14y ago
  I can't find the article now (stupid Google shows just ads and links to Amazon or Apple when I search for something like "iPad most popular model"), but here's one that claims 64GB 3G Model was the most popular iPad 2 model on launch: http://gigaom.com/apple/most-popular-ipad-2-model-is-also-the-most-expensive/ http://gigaom.com/apple/most-popular-ipad-2-model-is-also-th... Arguably, early adopters are different than "late"-adopters, but still... The "analysis" that I remember was for iPad 3, and it was a few months after the launch.

benlower 14y ago

Not sure what your definition of "that much money" is :-) The margins are estimated to be ~37% - ~50% depending on the model. http://www.isuppli.com/Teardowns/News/Pages/New-iPad-32-GB-4G-Carries-364-35-Bill-of-Materials.aspx http://www.isuppli.com/Teardowns/News/Pages/New-iPad-32-GB-4... Those estimated margins aren't as high as iPhone (http://www.isuppli.com/Teardowns/News/Pages/iPhone5-Carries-$199-BOM-Virtual-Teardown-Reveals.aspx http://www.isuppli.com/Teardowns/News/Pages/iPhone5-Carries-...) but are still pretty damn good :-)

seanmcdirmid 14y ago
Somewhere definitely north of 30%, 40% for high end devices. Keep in mind apple has its own retail distribution, so there is no middle cut (they offer very little to resellers like best buy). Apple has room to cut prices if they want, I don't think anyone else does though.
nilsbunger 14y ago
It's hard to run a hardware business at less than 35% gross margins. There are a lot of extra costs besides the bill of materials and assembly. 37% for apple might only be 25% for any other competitor, because apples supply chain is so streamlined and locked down. So it's hard to compete with the base iPad on price. At 50%, you are right, there could be room to undercut, but that's only the high-end iPad (eg 64gb) which isn't where the volume is. iPhone margins are much better, and thus leave more room for others to undercut or offer feature parity.