March 9, 2012 03:17 pm EDT

Early estimates say new iPad cuts Apple's profit margins

These estimates are always to be taken with a grain of salt but, if UBM TechInsights is to be believed, Apple is cutting into its precious profit margins to keep the price of the iPad flat. According to the research firm, the total cost of components in the 16GB 4G model is around $310 -- not including assembly and shipping. With a final price of $629, Cupertino is pulling in about a 51 percent profit, a sizable drop from the estimated 56 percent profit margin on the similarly specced iPad 2 at launch. A large chunk of that increased cost of production is made up by the new retina display, which is estimated to cost around $70, and the LTE chipset, which UBM priced at $21. In contrast, current pricing on the panel in the iPad 2 and its 3G radio rest at around $50 and $10, respectively. We're sure Tim Cook isn't losing any sleep though, there are plenty of other ways to make up that lost dough -- like selling more iPads.

Early estimates say new iPad cuts Apple's profit margins originally appeared on Engadget on Fri, 09 Mar 2012 10:17:00 EDT. Please see our terms for use of feeds.

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