Fatter Profit Margins Are Back Again!

Apple shares should have soared today (they’re down slightly) on news that AT&T is reporting three times more iPad Air activations than it got for the then-new 4th generation iPad this time last year on top of this exciting teardown news:


The base model iPad Air with 16 gigabytes of memory and no cellular connectivity comes with a bill of materials of $274, a 13% reduction in costs compared to the equivalent model in the third-generation iPad released in 2012, IHS says.

The new, thinner display actually costs more than the old Retina Display, and that’s the single most expensive component. So where’d Apple get the savings? Read on:

Another change noted in the IHS report is that Apple has significantly decreased the battery capacity in the iPad Air. Its battery capacity is 32.9 watt hours, down 23% from 42.5 watt hours in the third-generation version.

I suppose you can save a lot of money, putting in a battery that much smaller than last year’s. But that’s not where it gets interesting.

Apple put in the tablet market’s only 64-bit desktop class CPU, they improved the camera, made it thinner, made it smaller, made it the lightest full-size tablet ever, kept the same 10-hour battery life, left the retail price unchanged, and jacked up their profit margins?

Tim Cook has godlike powers.


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