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Apple forced to cut profit margins with new iPad, analyst says

Updated Dec 19th, 2018 7:50PM EST

In an effort to keep the iPad’s price the same, Apple may have had to cut profit margins compared to previous models, The Wall Street Journal reported. UBM TechInsights on Thursday estimated the company’s newest iPad cost about $310 to manufacture the 16GB, 4G LTE model, which retails for $629. Based on those estimates, Apple’s gross profit margin is 51%, 5 points less than the iPad 2’s 56% margin at the tablet’s launch. The cost increase is largely due to the new iPad’s Retina display, which UBM estimates to cost Apple about $70 compared to the $49.50 display found on the iPad 2. The 4G LTE chips also add $21 compared to $10 for 3G chips, and the A5X processor chip is estimated to costs $28, compared to $22 for the previous-generation A5.


Dan joins the BGR team as the Android Editor, covering all things relating to Google’s premiere operating system. His work has appeared on Fox News, Fox Business and Yahoo News, among other publications. When he isn’t testing the latest devices or apps, he can be found enjoying the sights and sounds of New York City.