Why Apple Can Produce Tablets for Less Money

The market research firm believes that Apple's control over the entire platform, especially the software provides it with a unique opportunity to design tailored hardware that deliver cost and integration scenarios its rivals cannot achieve.

“Apple takes a vertically integrated approach to its products, from the operating system to the user interface, to the hardware design, down to the selection of individual parts used in the device,” said Wayne Lam, senior analyst, competitive analysis, at IHS. “For example, Apple even uses its own applications processor design in both the iPad and iPad 2. In contrast, Android tablet makers buy those capabilities from the likes of Nvidia, Texas Instruments and Qualcomm. This gives Apple greater control in multiple areas of product development.”

For example, IHS said that Apple's ability to control the OS enables the company to reduce cost by limiting the quantity of memory in the iPad. The current-generation iPad 2 uses 512 MB SDRAM, while its rivals use 1 GB. "This memory density reduction results in a nearly $14 reduction in the bill of materials of the iPad 2 compared to other tablets, the market research firm noted.

“Since Apple controls both the operating system and hardware design of the iPad, it is able to attain design efficiencies that other tablet manufacturers cannot,” Lam said. “These efficiencies become obvious in areas like the memory and the battery, where Apple maintains advantages in cost, space savings and performance compared with every competitor in the business.”

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  • Doesn't surprise me! There's no way around it, but Apple has learned to maximize the use of its hardware for the software they employ. Sure the software could incorporate some features that Android has had for a while, but Android has all these powerful phones and tablets and there are distinct performance flaws regardless of the Hardware specs that trump Apple's offerings.
  • Ragnar-Kon
    Not a big fan of iPads (or tablets in general for that matter), but you have to admit that Apple is being very smart about this approach in mobile platforms.

    It costs them less money to manufacture the equipment, but yet they sell it for the same price (or more) as the competitors. Genius. Sure the specs of their products may be less than the specs of a competitor's, but if it performs just as well, who cares?
  • Assmar
    Not a single mention of Foxconn? They're replacing their employees with robots soon, because robots haven't yet learned how to commit suicide.