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 m

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.