Sign in with
Sign up | Sign in

Aggressively Priced iPad Still a Cash Cow for Apple

By - Source: Reuters | B 39 comments

Court documents that included unsealed Apple documents shed some light on Apple's individual product profit margins that are typically not provided by any company.

The documents revealed that Apple's margins are more than twice as high on the iPhone than on the iPad, but the iPad's margins are still well above the profit any other PC hardware maker can make.

Reuters reports that Apple had iPad gross margins of 23 to 32 percent between October 2010 and the end of March 2012. iPhone margins between April 2010 and the end of March 2012 were between 49 and 58 percent.

While the iPhone numbers are not surprising, especially since there have been analyst estimates that Apple can pocket about half of its iPhone revenues as profit, the iPad margins are rather impressive. Apple previously said that it was aggressive in its iPad pricing, which may be true in a comparison with the iPhone, but it is a very comfortable cushion when compared to the general PC and tablet landscape, in which other hardware makers have trouble getting into the double digits of profit margins.

The documents were unsealed as part of the proceedings between a suit that Apple filed against Samsung. Apple seeks about $2.53 billion in damages from Samsung.

 

Contact Us for News Tips, Corrections and Feedback

Display 39 Comments.
This thread is closed for comments
Top Comments
  • 26 Hide
    socalboomer , July 30, 2012 11:06 PM
    so, in a market where Apple pretty much has the monopoly and uses that monopoly to ride massive margins, they get to use the courts to enforce that monopoly. . .

    Nice.
  • 20 Hide
    jimmyjohnz , July 30, 2012 11:16 PM
    So Apple is suing their main part supplier for 2.53 Billion when Samsung is part of the reason they get such ridiculous profit margins? What are they playing at?
  • 18 Hide
    back_by_demand , July 30, 2012 11:29 PM
    A Bad DayIt's quite simple, they think Samsung needs them for the supply shipments' revenue.

    Of course Samsung tablets look like Apple tablets
    ...
    Apple tablets are made from Samsung parts - DUH!!!!
Other Comments
  • 26 Hide
    socalboomer , July 30, 2012 11:06 PM
    so, in a market where Apple pretty much has the monopoly and uses that monopoly to ride massive margins, they get to use the courts to enforce that monopoly. . .

    Nice.
  • 20 Hide
    jimmyjohnz , July 30, 2012 11:16 PM
    So Apple is suing their main part supplier for 2.53 Billion when Samsung is part of the reason they get such ridiculous profit margins? What are they playing at?
  • 10 Hide
    A Bad Day , July 30, 2012 11:23 PM
    jimmyjohnzSo Apple is suing their main part supplier for 2.53 Billion when Samsung is part of the reason they get such ridiculous profit margins? What are they playing at?


    It's quite simple, they think Samsung needs them for the supply shipments' revenue.
  • 17 Hide
    jivdis1x , July 30, 2012 11:28 PM
    Another reason I hate the majority of apple user. They are the one that let Apple operate the way they do. I actually likes apple product but their pricing scheme is pure robbery. That is why i don't own any of their product.
  • 18 Hide
    back_by_demand , July 30, 2012 11:29 PM
    A Bad DayIt's quite simple, they think Samsung needs them for the supply shipments' revenue.

    Of course Samsung tablets look like Apple tablets
    ...
    Apple tablets are made from Samsung parts - DUH!!!!
  • -6 Hide
    reprotected , July 30, 2012 11:33 PM
    jivdis1xAnother reason I hate the majority of apple user. They are the one that let Apple operate the way they do. I actually likes apple product but their pricing scheme is pure robbery. That is why i don't own any of their product.

    Apparently the argument can't be used the same for electricity and animal cruelty.
  • 17 Hide
    Kryan , July 30, 2012 11:43 PM
    Excuse me, but "Aggressively Priced iPad" sounds like it's...well aggressively priced, meaning a rival to other tablets in price. But then I saw Apple-fan-boi Perry wrote this, and it all made sense. 3000 dollars would seem a fair deal for an apple product to people like him.

    The only thing aggressive about apple are their lawyers.
  • 9 Hide
    teh_chem , July 31, 2012 12:17 AM
    Apple makes profit. Lots of it. Slow news day?
  • 12 Hide
    dgingeri , July 31, 2012 12:18 AM
    wow, they are really screwing over their customers. I'm glad I'm not one.
  • 10 Hide
    beayn , July 31, 2012 1:54 AM
    otacon72Lower the price, sell more product, make even more profit... Apple fails basic economics.

    Being the biggest tech company and competing for the top spot of biggest company by market capital might mean something other than your conclusion here.

    I'm no Apple fan, but they know how to turn a profit.
  • 1 Hide
    nanchamp , July 31, 2012 2:00 AM
    Why wouldn't they want to keep their company profitable? The above poster is absolutely wrong. The one thing I cant stand is a company under selling their brand. You end up getting crap like dell's gateway and acer. Apple is no where near perfect, but they are better than a lot of the other options for people who do not build their own or need a good laptop.
  • 2 Hide
    Anonymous , July 31, 2012 2:05 AM
    sell at any high price they want and attract people from the top pyramid--> regular Joe see it also want the product.....created the demand and became a iconic product others want to buy....still selling at the same price.....Joe pay the price...Joe happy...Apple happy...and its economics concept works very well....

  • -2 Hide
    tomfreak , July 31, 2012 2:48 AM
    Sooo I guess this further prove that point that Ipad is Apple most affordable product due to the lowest margin profit. The Ipad dominance in tablet market also prove apple that by putting aggressive pricing, they can sell more + earn more. So why does Apple still wanna sell their overprice iphone and macs?

    So Apple when u gonna drop ur other product price by 30-40%?
  • 4 Hide
    aznguy0028 , July 31, 2012 2:59 AM
    otacon72Lower the price, sell more product, make even more profit... Apple fails basic economics.

    Nope, that's what you don't understand. Apple is in a position where they don't need to do that. They don't need to make profit from moving massive amounts of units due to lower price (they can already move massive sales at high prices because of their image). Lowering prices tremendously to keep in line with other tablets would actually serve to hurt Apple by ruining the perceived "prestige" image of their products that their marketing team has worked so hard to earn. Don't fix what isn't broken.
  • 2 Hide
    southernshark , July 31, 2012 3:19 AM
    nanchampWhy wouldn't they want to keep their company profitable? The above poster is absolutely wrong. The one thing I cant stand is a company under selling their brand. You end up getting crap like dell's gateway and acer. Apple is no where near perfect, but they are better than a lot of the other options for people who do not build their own or need a good laptop.


    So True!! Dell and Gateway define low end crap.
  • 5 Hide
    A Bad Day , July 31, 2012 3:50 AM
    otacon72Lower the price, sell more product, make even more profit... Apple fails basic economics.


    Why lower price if your brand loyalty/recognition is so powerful that you can load a slightly modified 4G phone onto the market at full price and still make a killing?
  • 2 Hide
    radon_antila , July 31, 2012 6:17 AM
    otacon72Lower the price, sell more product, make even more profit... Apple fails basic economics.
    Except that Apple's products has proven to be inelastic. That is basic economics.
  • -3 Hide
    tomfreak , July 31, 2012 7:04 AM
    A Bad DayWhy lower price if your brand loyalty/recognition is so powerful that you can load a slightly modified 4G phone onto the market at full price and still make a killing?
    Cause they can make even more money?

    With the amount of Apple hater these days I pretty sure a lot of them are fence sitter. I dont mind become All out Apple if their pricing is about the same as other OEM.
  • -3 Hide
    belardo , July 31, 2012 11:17 AM
    TomfreakSo why does Apple still wanna sell their overprice iphone and macs? So Apple when u gonna drop ur other product price by 30-40%?

    Where do you come up with this crap? iPhone4s = $200 (iPhone4 = $100) gee, same price as $200 Samsung Galaxy SIII and HTC One X. The Lumia900 is $50 because nobody is buying them at $100. SAMSUNG Galaxy Tab 2 (10.1) 16GB = $400... just like the faster iPad2.

    The Mac computers are a bit on the high side, but not much more than a top end HP, Dell or Thinkpad. Apple doesn't need nor want a huge market share - they are already a huge company with only 7% of the desktop market... I'm sure they'd love to grow that to 20% or so, but not like MS.

    BTW: Im not thrilled or impressed with apples law-suit happy lawyers.
  • 4 Hide
    teh_chem , July 31, 2012 12:37 PM
    otacon72Lower the price, sell more product, make even more profit... Apple fails basic economics.

    You fail basic business philosophies. Look up brand dilution.
Display more comments