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How much does it cost to build an iPad mini?

When some say that Apple’s average profit margins are high relative to its competitors, they’re not lying.  Apple recently launched the iPad mini, and for the sake knowing how much Apple will make off each mini we will have to take a look at how much it costs Apple to manufacture each device.

A report from IHS has noted that it costs about $188 to build the 16GB Wi-Fi only iPad mini, with incremental changes as more memory is added.  For the 16GB Wi-Fi only model, Apple slaps it with a price tag of $329, thus, raking in $141 in profit (minus overhead, etc., etc.).

The 32GB Wi-Fi model is being sold for $429, but IHS estimates that it costs only about $15.50 for an additional 16GB of memory.  Hence, it costs just around $203.5 to build the 32GB unit, but the device will rake in $225.5.  Moving onto the 64GB model, and if I did the math right ($188+$46.5), Apple will make $294.5 with its current price tag of $529.

Intuitively (or at least in my mind), people should be ‘saving’ a buck or two if they opt to purchase the models with more memory.  Just like how the hard drive/SSD market has followed the ‘$/GB’ model, I kind of expected the same trend for the iPad mini, but boy am I wrong, dead wrong. 

In any case, if you’re thinking about buying an iPad mini, now you know that it’s probably best to buy yourself and your significant other each a 16GB model instead of buying one 32GB model.  That is, if you have that ‘$/GB’ mindset.

Source: IHS via All Things D

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