Research firm IHS has released a new report exposing Apple's profit margins on each iPad Air 2, based on the cost of the device piece by piece and the retail price. There are several factors that have influenced so that despite having a manufacturing cost only a dollar above the iPad Air 2013, the profit margin has narrowed slightly. We break down all the information in the following lines.
Same cost as 2013 iPad Air
The first thing that catches the attention of IHS report it is without a doubt the cost of the device for the company. According to their calculations, the entry-level iPad Air 2 (WiFi-only version and 16GB of storage that sells for $ 499) amounts to U.S. dollar 275, just a dollar more than last year's iPad Air. If we go to the most complete option (version with LTE connectivity and 128 GB of storage), also the most expensive (sale for $ 829), this figure rises to $ 358.
Margins are reduced
It seems impossible that with these cost-price differences the company's profits have been reduced, but there is an explanation. Nobody says that they are not still high, that they are, but they are lower than on previous occasions. To understand it, we look at the model with 16 GB of storage and the one with 128 GB. For Apple, this difference in internal memory costs U.S. dollar 50, which translates to $ 200 for users who buy the device. But we have to remember that those of Cupertino have removed 32GB option, and therefore, the difference was before almost 300 dollars, 270 to be exact, since each step was paid at 90 dollars. This has caused margins on devices with higher capacity to narrow. Apple's profit margin on the iPad Air 2 has decreased slightly to a range of a 45 to 57 percent depending on the device, compared to the original which was 45 to 61 percent. "
Some interesting details
The screen is the most expensive element of the iPad Air 2, it is a 28% of the total cost. Manufactured by LG and Samsung, it is practically the same as the original iPad Air with the addition of the anti-reflective layer, which has reduced its value for the firm from 90 to 77 dollars. The person responsible for the report says that the camera is practically the same as the one we saw in the iPhone 6 and iPhone 6 Plus with the exception of the optical image stabilizer, so the results should not be much worse than those obtained with the smartphone and the phablet . The two-camera pack costs Apple about 11 dollars.
Source: Recode