iPad 2 Smart Covers to generate over $1B in revenue for Apple, says analyst

By on Mar 14, 2011 at 1:12 PM
mobile March 14, 2011

Asymco analyst Horace Dediu has published an interesting prognostication on his company’s website: Smart Covers will generate over $1 billion in revenue for Apple this year. Dediu estimates that 60% of the 36 million iPad 2 tablets to be sold in 2011 will be paired with a Smart Cover. With an average price of $48 — based on sales of 70% polyurethane and 30% leather — and sales of 21.6 million Smart Covers, the final revenue figure is an impressive $1.04 billion. Estimating that the covers cost around $12 to produce, Dediu believes that Smart Covers could add $777 million to Apple’s gross margins. “It will be interesting to compare the Smart Cover business with competitor tablet businesses,” quips the analyst. Apple has yet to officially announce sales figures of any kind from the iPad 2 launch last week.

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  • Anonymous

    LMAO at Apple making more money off the covers than the Xoom will make in all by itself.

    • Dan

      Your 100% right. Moto dropped the ball on their “iPad killer” by selling it for about $400 more than they should have. Live and learn, I guess!

  • http://graydroid.wordpress.com Lezz

    Its raining money at Apple. Is there a way for me to buy small percentage of each share ?

  • Steverl22

    Good for them….

  • Anonymous

    I can only see the word anal anymore whenever someone mentions analysts.

  • Anonymous

    Revenue? Let’s see profit.

  • http://twitter.com/hestonk Heston Kan

    …..professional twice over – an analyst and a therapist. The world’s first analrapist……

    • http://www.youtube.com/watch?v=AR6HpRLyzMY Walter Sobchak

      After such a bleak post, which makes me sad with the world. You came along and brightened my day, I’m going to go watch some arrested development now.

  • Anonymous

    So Apple’s Cover will generate more revenue than most other companies will generate with tablet sales?

    That says a lot right there.

    • Tedkord

      Yes, it says that you could carve the Apple logo in the side of a cow turd, and people would buy it.

      • Yazanabdullah

        i agree and disagree; apple def takes advantage of people’s simple minds and brand appeal psychology (apple made it cool and popular to have their products so cool popular people are now attracted to their products); however, the truth has to be said, especially to those who are in denial; here is the truth:

        apple products are good looking so they look good when you carry them around and when you park them in your appartment.
        apple products are easy to use by everyone regardless of class, education, and age.
        apple products are perfect at the tasks that they are advertised or made to do (the iphone 3gs remains the fastest smartphone around with its humble CPU; all of apple’s touchscreens remain the most responsive in the entire mobile industry; apple’s ios remains the smoothest and fastest mobile OS; itunes is the richest media content store; apps created for ios remain the most aesthetically appealing of all other mobile OS apps).

        so NO, if u put apple’s logo on a cow turd, people won’t buy it. people ultimately buy apple products because they are superior when it comes to the limited tasks most average joes need to accomplish on a mobile device……

        non apple mobile devices will never be better than apple at what apple does best; so the only way for them to sell is to be either cheaper than apple products or provide important useful functionalities that apple cannot provide. the xoom is neither cheaper nor more useful, at least in the condition in which it was released. oh and btw, honeycomb blows…….

  • Anonymous

    You have to admit, Steve Jobs is pretty good at brain-washing;
    seriously, 1B$ for the same thing you can do with saran wrap?????

  • Anonymous

    So in other words, Apple’s “Smart Cover” business at $700 million+ in profit is more than twice as valuable than Motorola Mobility’s entire business (which will make less than $350 million in profit for the entire year).

    • http://www.youtube.com/watch?v=AR6HpRLyzMY Walter Sobchak

      You are just priceless!

  • Anonymous

    not everyone is as dumb and ready spend $69 for a cover may be one in ten iPad owners may buy a smartcover at best and others may look at a third party alternatives, how did the analyst arrive at $1 billion sales? is this a 5 year plan?

    • http://twitter.com/iJcal08 Jahmal Calvin

      its going to be higher than 20% everyone in line at the best buy I waited in line for bought one. I took my iPad2 to class today, and before people even looked at the ipad they wanted to see if the cover really unlocked the screen. Its actually quite useful to prop it up on a desk for typing of movie watching, while still keeping the iPad thin and light. 40 bucks was def a lot, but whats another 40 when you just shelled out 600?

  • Anonymous

    Analysts’ projections =/= fact

  • SteveWorks

    The cover is gay, and only Apple fanboys will buy that ugly cover, let’s screw everyone over and make them buy a cover for the flimsy ipad that has LCD bleeding.

    • heyhey

      says the homophobic android geek

      …..i wish u use the term gay in a derogatory manner in public the way u do in cyber space u coward piece of shit. use it in my presence and i ll shove my wrist down ur throat and my foot up ur ugly flat geek butt…

  • Hammo

    I call BS on these figures. I highly doubt that many people will buy Smart Covers. First, there are dozens of other casecover manufacturers. Second, based on my informal view of standing in line on Friday and watching people get their iPad2, me included, I think I saw maybe 2 people buy one of those Smart Covers.

    Plus the Smart Cover is really not all that smart if you think about it. Why have a cover that won’t protect the device? After all, that is the main reason people purchase coverscases, it’s to protect the darn things. This cover won’t do that. It will fall off if the iPad is dropped, and think about shoving it into a bag or purse, that cover will catch on something and get pulled off. Finally, the entire back of the device is exposed so people will end up scratching and damaging their iPads if they use one of these.

    Do these analysts actually get paid for this crap?

    • http://twitter.com/iJcal08 Jahmal Calvin

      Really? everyone in line with me at best buy bought one.
      And I didn’t buy it to protect it, I just bought it to prop it up on my desk in class.
      And to adress your falling off reasoning, I disagree, I actually put my iPad in the pocket of my binder and it stayed on.

  • Anonymous

    48 dollars for that smart cover is nuts! What a mark up on that price. I think 20 dollars is a fair charge but 48 dollars is insane.

  • Anonymous

    Damn, I didn’t see this one coming at all.
    Time to buy some AAPL shares.

  • John

    BGR quoting analysts again, I guess there is no real news to cover.

    I am analyst, I analyse Bulls*it I suspect Apple may release a pink iPhone 6 by Christmas

  • QNX Please

    $40 for a polyurethane cover hahaha, man you’d have to be retarded to pay that much for that. It’s worth about $12.

    Oh and the only way that cover costs Apple $12 is if they are assembled by hand in Italy. This is more Chinese made junk, the leather ones cost about $1.20 for Apple, this analyst is an idiot.

  • Anonymous

    That’s what I call clicking on all cylinders!

  • fabouls

    Typical BGR post!? 1 Billion!? How’s this even news!?

  • moosebump

    Apple also sells USB power adapters for $29. (ebay knockoff $3)
    USB cable $19. (ebay knockoff $.80)
    anti glare film $15 (ebay knockoff <$1)

    If they can sell $1B worth of covers, that just proves that there are alot of dumba$$es out there.

    Its hard to produce a knock off of the iPad itself, but I have faith in the Chinese that they can make me a decent cover for $5 or less.

  • Anonymous

    Apple my earn $1 Billion from a cover. Now thats a very smart cover indeed. Wonder how much Apple will make from the hdmi toggle also. Have to hand it to Apple, they know how to milk the ifans.

  • http://www.twitter.com/diontelove Dionte Love

    I bought one as well as one person in front of me and two behind me, I like it. So many different ways to prop my iPad and it protects the screen. I might still buy a clear cover of some sort for the back just for scratches gotta keep it pristine for when I sell it for the iPad 3.

  • http://openid-provider.appspot.com/collection60@googlemail.com Collection60

    The covers cost a lot more than 12$. They are high quality products, containing many magnets. Also, there was the entire R&D effort which was not free.

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