Apple’s recently released iPad mini is already reported to be a good seller for the company, with three million units of the iPad mini and iPad 4 claimed to have been shipped in just three days of sales. Despite so-called experts deriding the lack of a Retina display, we didn’t really expect anything different, did we?
As is always the case when Apple launches a new product, companies have been queuing up to rip the iPad mini apart with one sole aim – to work out just how much the little tablet costs to put together. The result, at least as far as IHS iSuppli believe, is that the low-end 16GB Wi-Fi iPad mini costs less than $200 to build.
Coming in at $188, the cheapest iPad weighs in at $329 at the cash register, which fits in with Tim Cook’s claim that the iPad mini is aggressively priced in that the profit claimed by Apple is lower, percentage wise, than its other products. The iPhone 5, for example, costs just $10 more to make but costs a whopping $649 in Apple Stores.
So where does all the money go? According to IHS iSuppli, the a hefty chunk of that $188 goes towards that new 7.9-inch display – 43% to be exact. The reason for that is likely to be the new production method used, dubbed GF2, which reduces the thickness of the display and as a consequence, the overall product. As the process is perfected though, it is expected that the costs of manufacturing the displays will fall.
As far as storage options are concerned, the options of 32GB and 64GB don’t cost Apple that much considering the profit the company claims on them.
The base model, a Wi-Fi-only 16 gigabyte iPad mini, which sells for a starting retail price of $329, costs about $188 to build. Adding additional memory — the options are 32GB and 64GB — adds only incremental cost but a fair amount of profit, amounting to an additional $90 for the 32GB version and $162 per unit on the 64GB model.
With Apple making less profit than we would perhaps expect on the iPad mini, we have to wonder why it’s here at all. Is Apple really concerned about the proliferation of small Android tablets, or does it simply see any profit as good profit at this point?