One of the big talking points surrounding the iPad mini announcement was the price. People were hoping for a $299 — or even better, a $250 — sticker to put the device more readily in reach. Unsurprisingly, the $329 actual price was more than they wanted. But there’s a reason for it to be that high — the components cost a bundle.
As reported by AllThingsD, IHS iSuppli has put together a bill of materials for the iPad mini, and they found that the 16GB version has $188 in components inside it. That’s mostly thanks to $80 in screen components, and another $15.50 for the memory.
That leaves Apple with $141 to pay for absolutely everything else: R&D, advertising, shipping and packaging, assembly, the works. Which actually isn’t a huge amount, when you get down to it.
Still, we can dream about a $250 iPad, can’t we?
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The real answer though is that Apple makes a huge amount of money through the App Store. That is why Amazon can sell the Kindle Fire for $199. They make it up on the back end. Apple refuses to do so. The allure of the iPad mini is that you have access to that App Store. So the argument of not being a huge amount is kind of pointless. It revolves more around the ability at $329 to fit into the various models and that they won’t encroach on the iPod Touch or the Ipad (big).
I agree but trying to make cash on the back end is in my opinion not that smart. Sony did this same tactic with the PS3 and it took them almost 4 years to actually start making money on each system. Lower prices is good for the consumer never the producer so I’m not mad at Apple for making a smart business move. Nintendo is also following this tactic on the Wii U which I believe will be a failure.