New iPad (LTE 32GB) costs $364.35 in parts, sells for $729
iSuppli has tallied up the cost in parts and manufacturing for the various new iPad models, and determined that the 32 GB new iPad with LTE costs $364.35 in materials ($375.10 after manufacturing costs). This is a pretty stark difference to the $729 retail pricetag, but that just goes to show you why Apple is so danged profitable. It's worth keeping in mind that Apple still has to pay to develop software, pay royalties, keep up their retail presence, among other miscellaneous costs, but even then, it's obvious that Apple is enjoying a healthy margin from all of their iPad models.
Of course, that's the what the production iPad costs, not the millions and potentially billions Apple has invested in research, development, prototyping, and in some cases inventing the manufacturing processes that allows these types of devices to be built. But that doesn't make for as provocative a headline, does it?
On the flip side, once Apple does ramp up production and economies of scale start kicking in, it may well be that Apple could afford to knock down the price a little bit, but the $500 has been the starting point for all upper-end tablets since the original iPad launched. Only now are we starting to see decent tablets like the Kindle Fire and BlackBerry PlayBook approach the $200 mark, though even there, older refurbished iPads are within reach. Assuming consumers are happy with the price point for the iPad, maybe Apple can turn over some of those extra profits to those working in Foxconn's factories, eh?
You can take a look at the full breakdown of material costs below.