Apple Inc. is set to make substantial margins on the iPad tablet, as the product only costs between $219 and $335 depending on the model, according to research firm iSuppli Corp.
According to a “virtual teardown” analysis by research firm iSuppli, the relatively low price of the iPad’s materials gives Apple flexibility to reduce the retail price over time.
“There’s certainly a decent amount of headroom in there,” iSuppli analyst Francis Sideco said. “If they had to reduce the retail price, they certainly could.”
iSuppli said the iPad will range from $219.35 for the 16 GB version without 3G, to $334.95 for the 64 GB version with 3G. Pricing of the iPad will range from $499 to $829.
Given the price difference, this suggests a gross margin - not including R&D, marketing expenses and various other costs - somewhere between 55 to 60 percent.
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The new iPad goes on sale sometime in March or April this year. According to analyst expectations, 6 million units should be sold in 2010, and up to 10 million units in 2011.