iPad Air Cheaper to Manufacture Than iPad 4

IHS Inc is a firm that picks up devices from the market, breaks them apart and then values each sub part that goes into its making. This way they arrive at the total cost that the company would have incurred in manufacturing the device. They have carried out a similar study of the iPad Air that Apple released recently. In their estimates the company would have spent $274 in the putting together a single unit of the iPad Air device. Apple sells the same in the market for $499. The company had carried out a similar study on the iPad 4 which Apple had launched last year. The making cost had been worked out at $316 for the iPad.

Apple, it means, have reduced their making cost as they have also reduced the overall dimension of the iPad Air compared to the iPad. It also means Apple’s profit margins are going to receive a fillip each time an iPad Air is picked up. IHS Inc has also pointed out that the profit margin for Apple increases with the model of iPad Air that have higher storage capacity. The additional storage capacity they point out costs apple just $8.40 more while the price tag that the product carries is $100 more than the previous variant with lower storage capacity. These no doubt have come at the best moment for Apple that has seen its stick receive some battering off late.

Competition too has increased manifold since the first time Apple released the iPad back in 2010. There are other makes in the market today and people are going for those products rather than the Apple make. This naturally has been a cause of concern for those at Apple. Apple has in the process been suffering a dip in its average selling price of the products. The iPad had sold at $508 at an average last year, while this year it has been getting $439 at an average. The decline is about 14 percent. All of this makes the last quarter of the year extremely important. Buying reaches a feverish pitch and manufacturers resort to all kinds of tricks to entice buyers. With competition perhaps being never this hot, its likely to be a bloody battle among tech manufacturers, to say the least.