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"While the iPad Air slims down in size, the profit margins are getting fatter"

‘iPad Air costs less to make than iPad 3’

Apple has cut the component costs of its new iPad Air, which carries a lower bill of materials (BOM) than the third-generation iPad that was introduced last year.

According to teardown analysis service IHS, the 16GB cellular iPad Air has a BOM of $304 (around £188). This represents a six per cent reduction compared to the BOM of the same third-gen model.

"While the iPad Air slims down in size, the profit margins are getting fatter," said Andrew Rassweiler, senior director, cost benchmarking services for IHS.

"Although the Air’s new, ultrathin display and touchscreen are more expensive than for the third-generation iPad, Apple has held the line on cost by taking advantage of price erosion in other areas. Furthermore, the iPad Air leverages the same components and suppliers that are used in the iPhone 5s and 5c as much as possible."

At launch, the iPad 3 had a starting price of £399, same as the iPad Air.

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