IHS teardown: Apple nets $224 on each 16GB WiFi iPad Air 2 it sells
Despite its upgrade, the iPad Air 2 shares a nearly similar bill of materials as its predecessor, claims IHS following its teardown analysis of Apple's latest tablet device. According to the analysis, the entry-level $499 16GB WiFi-Only iPad Air 2 costs Apple $275 to manufacture as compared to $269 for original iPad Air.
The biggest difference between the device generations is the Air 2's increased storage options, which saw Apple replacing the previous 16/32/64 configurations with 16/64/128GB. Apple kept the pricing constant, which means these higher capacities are biting into Apple's profit margins.
"The Air 2 delivers a series of refinements compared to the original Air but features nothing earthshaking," said Andrew Rassweiler, senior director, cost benchmarking services for IHS. "With largely identical display specifications and minor improvements in most other areas, Apple continues to offer evolutionary upgrades to the iPad lineup. It's interesting to note that by offering the consumer a 128GB model for the same price as last year's 64GB iPad Air, Apple actually has taken down our estimated margins a bit on both the 64GB and 128GB models. The increased memory configurations to 64GB and 128GB are some of the key upgrades here."
The most expensive component is the 9.7-inch IPS display, which is estimated to cost $77. Following in price is the mechanical and electro-mechanic components at $44, the touchscreen at $38 and the wireless components (BB/RF/PA) at $33. The cheapest parts are WLAN/BT/FM/GPS modules and the box contents which cost $5.
