A report from IHS, via Re/code, has costed out the various components of the iPad Air 2. Naturally, these prices are estimates — the exact nature of the deals Apple negotiates with its suppliers are not common knowledge. The report says that the iPad Air 2 costs Apple $275 in materials, with the screen making up the largest share with costs around $77.
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This culminates to a very similar bill-of-materials to the last iPad Air, which IHS estimated was worth $264 in components. This leads to an implied profit margin of 45 percent, but obviously there are more things that have to be accounted for than parts alone.
What’s most striking from this breakdown is how Apple continues to exploit customer’s wallets when it comes to memory storage. According to IHS, the 16 GB chips in the low-end iPad model cost Apple less than $10. At the high end, 128 GB sticks are priced at about $60 per unit.
Nevertheless, Apple charges four times as much for the upgrade a retail, a $200 premium. This is an improvement over last year, though, where Apple would actually charge $300 for 128 GB as it sold 4 different storage sizes of iPad topping off at $799.
… I’d love to see the profit margins on the iPad mini 3.