Report: Apple Earns Less on New iPad But Tipped to Maintain Overall Profitability
Apple's huge cash chest is no secret and most definitely that reserve keeps on adding up as new Apple products hit the market. Yet how much really has Apple been cashing on its incredible success lately?
According to IHS iSuppli, another of the teardown firms which had picked up the habit of tearing open new Apple products, the Cupertino, California tech giant appears to be pocketing more profits when it first relased the initial iPad version than with the new edition of the device.
By its estimates, manufacturing expenses for iPad 1 reached roughly $US276 while the iPad 2 required at least $335 to put together a working unit.
For the new iPad, according to The Associated Press (AP), Apple had to fork out $365 to pay for the Chinese assemblers who sweated in completing the now-iconic tablet computer, cost that is based on iPad with 32GB RAM and has cellular connectivity.
And with the announced retail price of iPad following its launch Friday last week, starting at $499, iSuppli analysts have estimated that Apple had decided to give away some profit margins presumably to keep its hold as the dominant tablet computer in the world.
Researchers said iPad dominates the market by more than 60 percent at the end of 2011 despite ferocious competition that appeared since last year, mainly on the Android platform and with Samsung representing as the most serious iPad competitor.
The new data represents also grounds that Apple has so far surrendered to Android-powered tablets despite its somehow secured hold on the top, which clearly it plans not to yield any further, however few inches, when it decided to maintain iPad's retail prices from last year.
Analysts said Apple indeed has the sufficient leverage to do so and with the way that iPads have been flying off the shelves worldwide, with indications that current supply will not meet the heavy demands, its sacrifice will again be paid off with unsurprising record sales by the end of 2012.
IDC has reported last week that some 100 million tablet computers will be snapped up this year and yes most of these units will come in the form of either white or black iPads, with again Android tablets and possibly Windows 8 units reduced to fight over the remaining market shares.
Despite reducing its profit margin on iPad, iSuppli analysts said Apple is not looking forward on even slight retreats on its 2012 financial results as experts even forecasted that it'll be another banner year for the company.
Apple, iSuppli said, earns more on every iPhone sold and as far as the market is concerned, the company has nowhere to go but up.
Last week, Apple momentarily clocked $600 per share before settling down again below that mark but its total market capitalisation remains beyond $500 billion, indicators that analysts said only pointed to the firm's ever growing strength.
And many tech firms were celebrating the ascent, analysts said, as Apple's almost incessant requirement for iPad and iPhone components spawned contracts that benefitted a number of global tech players.
One of them is Samsung, which maintains billion-dollar supplier contracts with Apple while at the same time earns the distinction as the one major thorn on the side of the American firm, both in the retail and legal respects.