What’s the iPad really worth?
Apple has plenty of buzz surrounding their new hybrid device – the iPad – which was unveiled last month. The tablet is expected to devastate Amazon Kindle sales (and hard copy book sales) with its own apps store, bookstore and gaming capabilities. So what is this coveted iPad really worth? The guys over at iSuppli tore down the device and priced it out based on materials and manufacturing costs. Apple is selling the new device for $499 but what does it cost Apple to manufacture? Check out the breakdown after the jump…you’ll be surprised.
The above chart shows that the $499 price tag on the new device costs Apple little more than $229.35 to manufacture, making it highly profitable. So what does that mean for you? Well, if you are an early adapter of the product you will be hit with the $499 price tag to get your hand on a new iPad, however, if you decided to wait out the storm for a few months Apple will probably lower the cost of the entry device…did somebody say $299? That is pure speculation but Apple has adjusted pricing just months after releasing other high end devices (remember the iPhone!).
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Image via flikr – frasperspeirs’
You have to remember one thing, this is apple…APPLE. We pay for that little tag on that back that says “Designed in Cupertino”. People buy apple products because they are generally of a more eclectic essence, more streamlined, more….pretty. I sit here amongst a pile of Dell and other functional PC laptops but atop them all is a sleek and smooth MacBook Pro. Looking at that pile, I see why I paid a minimum of $500 more for that computer than the others.
Oh, and from a production point of view, that’s really not that much of a markup. I worked with the iLiad by iRex, the first actual e-ink e-reader (think Kindle) and watching their markup of almost 230% at the beginning while settling down at a 110% markup at current market. Apple only having a 45%~ markup at launch is not too terribly bad, in fact, I expected more!