iPad 3 9% more expensive to build, lowers Apple profit margins

Apple's iPad 3 is more expensive to build than the previous model, which will eat into their profit margins this year. IHS iSuppli took the device apart on launch day and said that it will be costing Apple more than V2.

Many were expecting Apple to raise the price of the iPad 3 when factoring in the new technology, such as the high resolution screen, additional memory and improved processing power. iSuppli said that the new iPad with 32GB of storage and a modem will cost them $364.35 to manufacture. They are selling it for $729. The previous version cost $335 to make, showing a 9 percent increase in manufacturing. This is before packaging and overhead costs are factored into the price.

iSuppli claim that the cost increase is also due to the new, larger battery to maintain the same life as the iPad 2. iSuppi add that the screen costs Apple $87 with another $40 for the touch sensitive layer.

Kitguru says: Samsung may be fighting Apple in many countries over Trademark ownership but iSuppli say that almost half of the new iPad's ‘bill of materials' may be for Samsung components.

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