Despite more expensive advanced display, Apple’s iPad Air costs less to make than earlier iPads

“There’s a new iPad in town, and that means that folks at the research firm IHS are once again doing what they do best: Taking it apart for a look inside,” Arik Hesseldahl reports for AllThingsD.

“In the latest of its teardown analysis reports obtained by AllThingsD, the firm says Apple’s iPad Air costs between $274 and $361 to build depending on model,” Hesseldahl reports. “Some key changes occurred on the iPad Air from the third generation iPad, which was the last full-sized model IHS studied.”

“The biggest changes he said were with the display and touchscreen assembly. For one thing, it’s thinner and has fewer layers in the combined assembly than in previous models. But at an estimated combined cost of $133 (About $90 for the display and $43 for the touchscreen parts.) it’s a lot more expensive than before, he says. South Korean electronics companies LG Display and Samsung are both thought to be suppliers of the display, he says,” Hesseldahl reports. “For the touchscreen bit, there’s a new type of sensor known as a cycle-olefin polymer (COP) sensor that sits underneath the outer layer of Gorilla Glass that users touch. What used to require two layers of glass, Rassweiler says, now requires only one. The result, the whole assembly measures out to 1.8 millimeters thick versus 2.23 millimeters on the third-generation model.”

Much more in the full article here.

11 Comments

    1. No. They didn’t.

      Anybody that follows Apple’s Guidance is aware that there is a predictable delta between that Guidance and Apple’s reported results.

      Based on Apple’s Guidance, consensus Gross Margin is very close to being spot on.

      The only thing that would cause Gross Margin to come in greater than Apple’s Guidance, would be an unexpected unit sales volume of iPhones and (to a lesser extent) iPads. This is not likely, as Apple’s Guidance for the last 6 quarters has very consistently accurate (accounting for historic delta between Guidance and results).

      Anybody that argues against this just doesn’t know what they are talking about.

  1. Takeaway: Apple pushing the technology curve harder is reducing component weight and cost seemingly faster than most rivals from what I read.

    Given Apple’s innovation lead and the increasing volume, Apple may one day actually be able to keep prices even closer to its inferior rivals, giving even less reason to buy 2nd best.

    1. Hate to break it to ya, but Apple is in the business of making money, and if customers are willing to pay the prices Apple is asking (in sufficient quantities), what motivation does Apple have to lower them? Sure, I’d love the iPad starting price to be $100 lower and their (hideously overpriced) storage upgrades to be about half what they are, I doubt that will happen.

    1. Also, try one for a while (without a retail store harness/lock on it) and go back to your iPad 4 right away. You might not like it so much after using an Air for a little while. I can’t believe how much lighter, thinner and smaller it is while still being so fast.

    1. I’m pretty sure 1GB is sufficient. 256MB on my iPad1 was ridiculous and probably the reason for Safari crashes. But I see no issues on my new Air with multiple “heavy” web sites open.

  2. I do find this new screen feels different to the touch than my iPad1. Not as hard/rigid and probably due to the thinness of the whole device. It feels more like plastic than glass, but just compared to older iPad I guess. I find taps don’t register as well (“holding” a link for the pop-up menu is fudgy specifically) but hoping that’s just an iOS 7 bug and not the hardware.
    Also, as I suspected there are pretty big margins in those higher capacity iPads compared to the 16 GB model !

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