HIS iSuppli: Apple takes home a margin of 43% with the iPad Mini
This entry was posted on Monday, November 5, 2012.
HIS iSuppli recently went and tore down the iPad Mini to find out what the new Apple tablet’s innards were made of. While most of the findings revolved around the processor and other hardware specs, HIS has gone ahead and tried to find out the precise cost that goes into manufacturing a single unit of the iPad Mini.
As it turns out, Apple makes a healthy gross margin on every unit of its new tablet. For the 16GB model of the Mini (which retails at $329), the total sum of the prices of the underlying components comes to $188. In other words, that is a gross margin of a little over 43%. The margins go even higher with the 32GB and 64 GB models, with gross margins easily crossing 50%.
Of course, the 43% figure doesn’t even nearly account for the amount of money Apple spends on research and development for their products. With recent reports indicating a sharp rise in the Cupertino company’s R&D spend in the fiscal year of 2012, a decent chunk of that will presumably have gone into developing the Mini – which happened to be a new form factor that Apple hadn’t dealt with before this. Moreover, it is safe to assume that Apple implements some rigorous Quality Control procedures with its products, and those costs can hardly be accounted for in the physical teardown that HIS went with. All in all, the 43% gross margin statistic can be treated with a pinch of salt by plenty of people, but it also serves as a comparison between the business models of Apple and Google (or Amazon for that matter).