The $499 iPad costs Apple $270 in materials & manufacturing

[marksman]

Given those figures sounds like Apple will likely be losing money on the $499 units when everything else is factored in.

Makes sense, because it seems they are likely subdizing that unit with the higher prices of the other units, both wifi and 3g.

They get the low end unit and sell it at a point where they lose money, but make up for it with the other priced units, and with backend content revenue.

This is one of the reasons why nobody else is going to be able to make a comparable device and sell it for $499

 

[Dammit Cubs]

it only cost 16 dollars for a 3g module? Did I read that right?

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[goobot]

i dont know the ipod is 200 but this has more memory, ram, more processing power, ect

 

[goobot]

it only cost 16 dollars for a 3g module? Did I read that right?

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yah 50 would sound better

 

[till]

<insert software here> costs $0 in "materials and manufacturing". And yet people charge $1, $5, $100+ for it. How outrageous!

For another example, a new prescription drug probably costs pennies per pill to make, but total development costs these days average about $1 billion, from basic in vitro experimentation to trials and regulatory approval.

You want to talk about profit, get serious about your calculations. It's beyond absurd to ignore the labor costs in developing the hardware and software. If the rumors are true, the tablet has been in the works since well before the iPhone was released, and has likely gone through many hardware iterations until they got something they liked.

 

[hundleton1]

there cant be much in it for apple on the iPad as even the Chinese like Acer have already publicly stated that they are not going to complete on that price point, this has shaken up the whole industry a lot, normally apple have very health margins and this gives other manufactures room to easily beet on price, however this time apple have dropped there normal methods, it seems to be a volume game with the iPad.

 

[Jinkst]

Call me crazy, but I figure that Apple also pays their employees. That money has to come from somewhere.

Bingo. Probably the most valid point made here.

Also, it's quite obvious that Jobs is struggling for a buck. The guy can't even afford a belt to wear to a keynote address. Come on now, cut the company some slack.