Here's Why The iPad Is Cheaper Than The Wannabes

stephen colbert ipad

Apple’s iPad is still the best tablet on the market, and today’s iPad 2 should be even better.

But Apple’s advantage over its Google Android rivals isn’t just quality, it’s also price. The iPad is still CHEAPER than many of its lower-quality competitors.

How does Apple do it? Forbes’ Eric Savitz summarizes a research note today from Bernstein analyst Toni Sacconaghi.


  • Apple didn’t leave a pricing umbrella, and happily took lower margins on entry-level iPads. “Our detailed analysis of Apple’s margin changes over time suggests that iPad gross margins were likely 26% – 30% in the launch quarter; we think they have improved to 32% currently due to falling component prices.” (This is well below Apple’s company average. But it can afford to do that because iPhone margins are so high, etc.)
  • Apple has advantages in scale and component purchasing.
  • Apple sells a lot of iPads through its retail stores — about a third, he estimates — which not only don’t stock rival tablets, but also provide the company more profit than selling through partners.
  • Apple’s home-designed processor also saves some money on each unit, versus buying chips from someone else.

Don’t miss: It’s iPad 2 Day! Here’s What You Need To Know

And: Are these LEAKED PHOTOS of the iPad 2?

Finally: Here’s What It Was Like The Last Time Apple Unveiled An iPad

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