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Apple doesn’t make that much profit on the Ipad Mini

Costs firm $188 to build
Tue Nov 06 2012, 11:39

A TEARDOWN has revealed that Apple isn't making much money on the Ipad Mini, as it costs the gadget maker $188 to build.

Research firm IHS, previously known as Isuppli, has taken the Ipad Mini to bits, revealing that the 16GB model costs Apple roughly $188 to build, which it then goes on to sell for $319 - not much of a profit by Apple's standards. The Ipad Mini 32GB and 64GB models cost around $31 and $62 more to make, IHS added.

The display made by LG is the most expensive component of the Ipad Mini, costing around $80, with memory chips costing the firm about $15.50.

It might spend a fair amount making the Ipad Mini, but it's making much healthier profits than its rivals Amazon and Google, due to the Ipad Mini's higher price.

"Apple's strategy entails offering differentiated hardware that justifies higher price tags than comparable products," said Andrew Rassweiler, senior principal analyst for teardown services at IHS.

"This differs markedly from Amazon's 7in Kindle Fire HD and Google's Nexus 7 tablets, both of which are essentially low-margin or no-margin giveaways at a $199 retail price.

"Apple makes healthy margins on its hardware, while Amazon and Google employ different strategies with their 7in tablets."

It might not be making as much money on the Ipad Mini as it does on each Iphone or fourth generation Ipad sold, but given that Apple shifted three million tablets over last weekend, we don't think it'll be struggling any time soon. µ


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