iPad Air Is Much Cheaper To Make Than iPad 3 – Costs $274

According to IHS and AllThingsD Apple’s new iPad Air costs between $274 and $361 to build depending on the model in question. This means absolutely huge profit margins for Apple as the devices sell from between $499 to $929, with cheapest being a 16GB WiFi only model and the most expensive being a 128GB WiFi and Cellular model. What this also means is that the base model iPad Air is $42 cheaper than the base model iPad 3 which cost $316 to make – an impressive reduction in costs on Apple’s part.

Apparently the most expensive component is by far the display which costs a combined $133 of the total $274 ($90 for the display and $43 for the touchscreen elements). Apple’s new A7 chip costs them just $18 to manufacture in their contract with Samsung. That means the new Apple A7 processor costs $5 less per chip than the Apple A5 processor did 18 months ago.

According to IHS Apple stands to make a 45% gross margin on the base 16GB WiFi-only model and a 61% gross margin on the most expensive 128GB LTE version.

Images courtesy of IHS and AllThingsD