It’s that time again where a newly launched device gets the teardown treatment to reveal quite a few of its characteristics. With reparability being the prime focus, we are also given an insight at what’s running inside. And it’s the iPad Mini this time which receives the teardown treatment. It’s not iFixit though, but IHS iSuppli which conducted the said teardown. Quite a few things were revealed post the teardown, but more prominently, it has come to light that the materials used onboard the new iPad Mini adds up to a total of $188. This for the tablet which retails at $329, indicates quite a bit of margin. However, the profit margin here is lesser than the fourth generation iPad, so in a way Apple would want customers to buy more of that than the iPad Mini. But we figure, Apple is expecting to make up for low profits with sheer volume of sales.
Apple’s gross profit margin from the iPad Mini would come close to 43%, while net profit would be marginally below the 40% mark. The display panel accounts for most of the production cost ($80) as it utilizes a new display tech which gives it the thin form factor. Other components like the processor, RAM etc would make up for the rest of the cost. And since there’s no Retina Display here, it wouldn’t set Apple back by much anyways.
All things considered, a gross profit of $141 is not a small amount when we consider the profits made by Google and ASUS in the Nexus 7 and Amazon with its Kindle Fire lineup. Apple has clearly stepped into the budget tablet scene, but without much noise in my opinion. People favoring budget tablets will still pick a Kindle Fire HD, Nexus 7 or a Nook HD/HD+ over an iPad Mini, because despite Apple’s claims, the iPad Mini is still somewhat of an overpriced device and doesn’t quite cut it for the budget customer. That’s my opinion of course. What this does mean though, is that Apple is taking its competition very seriously. It wouldn’t be wrong to presume that plenty of users out there would get both the iPad Mini and/or the budget ranged Android tablets. As evidenced by the image above, it is very clear as to how the iPad Mini fares in comparison to the competition.