New iPad shipments already delayed days after announcement

Mar 9, 2012
Finance

Apple’s updated iPad is going to define at least the early part of 2012 for the company – that much is obvious. It signals the beginning of a big shift for the company with the addition of 4G LTE connectivity and Bluetooth 4.0, and includes a number of features that users have been asking for […]

Apple’s updated iPad is going to define at least the early part of 2012 for the company – that much is obvious. It signals the beginning of a big shift for the company with the addition of 4G LTE connectivity and Bluetooth 4.0, and includes a number of features that users have been asking for since the original iPad was first announced.

And it seems Apple has a lot to look forward to starting on March 16 when the new iPad goes on sale. Already, pre-order deliveries for the device are being delayed, according to a story from Boy Genius Report. According to Apple.com, the device already won’t be shipping out to some pre-order customers on the day it launches.

Shipping dates for a couple of models of the new iPad have been pushed back to March 19, three days behind the new iPad’s official launch, presumably because of high demand. In fact, Apple’s online store and AT&T’s website were hit pretty hard with traffic on Wednesday after the announcement of the new device, slowing both to a halt briefly. People, it seems, can’t wait for Apple’s next tablet, especially if it’s white, carries a 16GB hard drive, and runs on AT&T’s network.

Apple.com still has Verizon versions of the 16GB white iPad being delivered on March 16, but it’s pretty likely that situation won’t last. Apple devices are notorious for demand outpacing supply after new models are introduced. On the plus side (for Apple), that high demand will help give Apple some economy of scale to help with the reduced profit margins it’ll make on the new iPad as opposed to earlier models.

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According to a story from Electronista, Apple’s new iPad costs more to make than the previous models, which means that Apple will make less per device than it did on the iPad or iPad 2. Apple hasn’t raised the prices on the tablet, with the lowest-price model still starting at $499; meanwhile, Electronista found it costs Apple $310 to produce a new iPad, and did the math to find that the new iPad has a profit margin of 51 percent (before other factors are considered). That’s still pretty high, but a marked deduction from the profit margin on the iPad 2, which came in at 56 percent.

Most of the cost comes from the new iPad’s Retina display, a preliminary cost breakdown by UBS TechInsights suggests, a component which is estimated to cost significantly more than the iPad 2’s screen – $70 as opposed to about $50. The 4G LTE cellular radio built into the device is probably also more expensive than its 3G counterpart by a little more than double ($21 versus $10), and the A5X likely costs a few dollars more over its predecessor, the A5 processor ($28 versus $22).

Still, if early evidence is any indicator, Apple shouldn’t find itself hurting too badly for the costs associated with the new iPad. And it sounds like if you’re planning to have one of the new tablet’s on launch day, you need to act fast to secure one.

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Phil Hornshaw

Phil Hornshaw is a freelance writer, editor and author living in Los Angeles, dividing his time between playing video games, playing video games on his cell phone, and writing about playing video games. He’s also the co-author of So You Created a Wormhole: The Time Traveler’s Guide to Time Travel, which attempts to mix time travel pop culture with some semblance of science, as well as tips on the appropriate means of riding dinosaurs. Check out his profile.

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