Aggressively Priced iPad Still a Cash Cow for Apple

News
By Douglas Perry
published

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.

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Douglas Perry
39 Comments Comment from the forums
  • socalboomer
    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.
    Reply
  • jimmyjohnz
    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?
    Reply
  • A Bad Day
    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.
    Reply
  • jivdis1x
    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.
    Reply
  • back_by_demand
    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!!!!
    Reply
  • reprotected
    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.
    Reply
  • Kryan
    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.
    Reply
  • teh_chem
    Apple makes profit. Lots of it. Slow news day?
    Reply
  • dgingeri
    wow, they are really screwing over their customers. I'm glad I'm not one.
    Reply
  • beayn
    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.
    Reply