# $499 iPad costs $260 to make.



## BTackitt (Dec 15, 2008)

http://news.yahoo.com/s/ap/20100407/ap_on_hi_te/us_tec_techbit_ipad_costs


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## Bren S. (May 10, 2009)

Yep. I've seen those figures a few times now.

A bit more info.

"A midpriced 32 GB version of the iPad that sells for $599 contains $289.10 worth of materials. A high-end 64 GB version, which retails for $699, contains components that cost $348.10, according to iSuppli."
http://www.businessweek.com/technology/content/apr2010/tc2010046_788280.htm?campaign_id=technology_related

All business' make products to make a profit.


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## sjc (Oct 29, 2008)

I certainly wouldn't want to go into business without turning a profit.  Most things are way more than what they actually cost. 

I'll give you an example:  My brother in law and sister in law are both pharmacists...  The Name brand pills I take actually only cost appx. 2.5 cents per pill yet I pay $60.


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## geko29 (Dec 23, 2008)

In both cases, there's millions of dollars in R&D to pay off.  To use your example, sjc, the second pill costs 2.5 cents, but the first one cost $60 million.  A device like the iPad is no different, though there does seem to be a significantly higher margin than is typical for new technology.  But obviously the market will bear it, so no big deal.


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## Ilovetoread (Apr 4, 2010)

sjc said:


> I'll give you an example: My brother in law and sister in law are both pharmacists... The Name brand pills I take actually only cost appx. 2.5 cents per pill yet I pay $60.


$60 a pill


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## DenverRalphy (Mar 24, 2010)

Marketing is one of the reasons I'm never an Early Adopter of new devices. Will I ever own an iPad? Perhaps, but it'll be after 2nd or 3rd gen manufacturer releases after the gold rush passes by (probably shortly after this year's Christmas/Holiday season). Initial prices are always based on what the consumer is willing to pay. I like to wait for bugs to be ironed out, demand to slump a bit, and then get a better deal.

Marketing is a powerful tool that Apple knows all too well. I think Steve Jobs took an example of the Pet Rock, which had an estimated cost of 65cents per rock (including packaging etc) yet sold for $3.95 each in the 1970's. The man behind the pet rock netted approximately $5million over a 6 month period in 1975. And all that made for selling _rocks _in a box.


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## jason10mm (Apr 7, 2009)

I don't think you will see NEW ipads dropping in price. The Apple model seems to be selling increasingly sophisticated new models at the same price points and discontinuing the older ones. So I expect next year the ipad 2.0 will still be $500, you will just get 32 gigs of storage and a better battery. So while you might be getting a better $$$ deal, you are not really saving money unless you want to buy a used older model from someone.

Unless someone can push a fully featured tablet for well under $500 Apple will see no need to cut base prices.

A 100% mark-up is pretty common for retail consumer items, only a few areas are so cut throat that margins are less. I hear HDTVs and PCs, mostly. Really, how much does a Kindle cost to make? I bet at this point that eternal 3G connection costs more than the hardware.


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## DenverRalphy (Mar 24, 2010)

jason10mm said:


> I don't think you will see NEW ipads dropping in price. The Apple model seems to be selling increasingly sophisticated new models at the same price points and discontinuing the older ones. So I expect next year the ipad 2.0 will still be $500, you will just get 32 gigs of storage and a better battery. So while you might be getting a better $$$ deal, you are not really saving money unless you want to buy a used older model from someone.


Each newer model will definitely be priced the same, yes definitely. When I mentioned 2nd or 3rd gen manufacturer releases, I was referring to upgrades to the current model. For example the issues with overheating and other minor issues currently being reported, the manufacturer will make changes/upgrades to correct those issues. Usually with any gadget, by the time the 2nd or 3rd generation of the same model is released, the bulk of the sales have already been made, and then the special deals or discount prices start to arrive. Take for example the iPhone 3GS. It's now retailing around $100 less (or more if you look for the deals) than when it was initially released. Granted the 4G model is within 4-6 months of release.


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## jason10mm (Apr 7, 2009)

Yeah, we will see. I think the smart phone market is MUCH more cut throat than the tablet market. The ipad might follow a course more like the ipod, with fewer drastic innovations spread out over a longer period of time. Hard to say until these other tablets come out. The HP slate specs were pretty disappointing (screen res and battery life in particular). The Dell mini 5 is what I think might shake things up a bit (might be more of an iTOUCH competitor), though if it is anything like the Axim v50 the software was a bit lackluster. Still, I think Google is a partner and that might allow for some pretty cool things.

What is really exciting (to me, at least), is that in 20 years tablet PCs might be the standard, replacing hinged keyboard/display types completely. Then we can tell our kids (or grandkids, for some of you  "we were there", kinda like when the phone or electricity was invented  Heck, e-readers alone might make enough of an impact to merit being a significant cultural landmark (like the cell phone innovation). Having to physically carry around books might be just as quaint as having to arrange to be home at a specific time to receive a phone call on a land line


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## Bren S. (May 10, 2009)

sjc said:


> I certainly wouldn't want to go into business without turning a profit. Most things are way more than what they actually cost.
> 
> I'll give you an example: My brother in law and sister in law are both pharmacists... The Name brand pills I take actually only cost appx. 2.5 cents per pill yet I pay $60.


I think prescriptions are one of the biggest rip offs out there,and they know they have people because the medications are needed.


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## Ann in Arlington (Oct 27, 2008)

jason10mm said:


> What is really exciting (to me, at least), is that in 20 years tablet PCs might be the standard, replacing hinged keyboard/display types completely.


It's certainly possible.. . .though I have to say that, personally, I prefer a "real" keyboard as opposed to one on a touchscreen. . . .but that's just me.


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## sjc (Oct 29, 2008)

> It's certainly possible.. . .though I have to say that, personally, I prefer a "real" keyboard as opposed to one on a touchscreen. . . .but that's just me.


Nope...it's not just you. I like a real keyboard as well.


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