The iPad Air Is Cheaper to Make For Apple -- Without Passing the Savings On to You

By Gerald Lynch on at

A brand new iPad at last year's prices? Yay! A brand new iPad at last year's prices that's cheaper for Apple to make than previous year's models? Boo!

That's the finding of the IHS research team -- it's pulled apart the new iPad Air slate, and conducted a part-by-part breakdown of the costs. Depending on the model, an iPad Air costs $274 to $361 to make. Though IHS don't have tear-down price data for the iPad 4, that's a $42/ £26 production cost decrease over the iPad 3 base model. That translates to a production cost of £170 for the 16GB Wi-Fi model, going up to £225 for the 128GB Wi-Fi and 4G version. Their retail prices? £399 and £739 respectively.

Of course, that's not taking into account the cost of shipping devices around the globe and import taxes, which is what is usually attributed to a UK price hike. But even in the US the profit margins are astonishing -- if IHS's findings are accurate, Apple are making a 45 per cent profit on the base models, and 61 per cent on the top-tier 128GB Wi-Fi/4G versions.

Though the screen itself is now more expensive than ever for Apple to make, a combination of fewer LED lights working within the display and a single cellular chip to handle all US carriers has helped drive production costs down. [AllThingsD]