Detailing the teardown to AllThingsD recently, research firm IHS concluded that the 16GB, Wi-Fi iPad Air cost just $274 to build, some $42 cheaper than the same-specced iPad 3.
That said, some components were more expensive than before. The Retina Display was one example, even though it relied on fewer LED lights (36 compared to 84) as it used an optical film layer to spread the lightness.
Other notable findings included that the A7 chip cost $18 –$5 less per unit than the A5 18 months ago – and that the iPad Air’s LTE chip supports all U.S. wireless carriers (unlike the iPhone 5C and 5S).
IHS estimates that Apple achieves a 45% gross margin on the low-end iPad Air with this rising to 61% for the 128GB LTE version.