New iPad Display and Chip Lowers Apple's Profitability

Beijing time on March 12 news, according to foreign media reports, the investigation company UBM TechInsights said that after a preliminary analysis of the cost of Apple's new iPad parts and components found that the new tablet computer using cutting-edge display and mobile phone chips to pull down the profits of Apple rate.

UBM estimates that for the new $619 Apple iPad with 4G capabilities and 16GB of storage, the cost of parts and components is around $310. This shows that Apple's gross profit margin is about 51%. In comparison, the iPad 2 was estimated to have a profit margin of 56% when it was launched a year ago. With Apple’s announcement of price cuts and component cost reductions, the current profit margin should be 53%.

The increase in the cost of new iPad parts mainly comes from the display screen. This higher resolution display is considered to be the key selling point of the device. UBM estimates that the cost of the new display is about $70, while the latest estimate for the iPad 2 display is $49.50.

Another component that causes cost increases is the mobile phone chip that supports LTE technology. The estimated cost is 21 dollars, while the 3G chip used by the iPad 2 costs only 10 dollars. According to UBM estimates, the new iPad's main processor chip costs 28 US dollars, while the iPad 2 only 22 US dollars.