Competitive price structure for iPad 3: Adjusting the cost

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Apple knows that in order to stay on top in the tablet market, they need to offer a competitive price structure for the iPad 3. There are a number of ways in which they can do this, but the easiest way when it comes to adjusting the cost is by using cheaper components. This may alarm you, but there is no need to be worried, as it does not mean that the iPad 3 or even 4 will not offer the same quality as the current second-generation version.

DigiTimes reports that Apple has now started to source components from a number of new manufactures, such as Novatek Microelectronics, Capella Microsystems, Integrated Memory Logic and Richtek Technology. They will only supply minor parts, but it is the little things that add up, so any sort of saving will be able to be passed on to the consumer.

We cannot say for certain how much Apple will save by these cost saving measures, but something needs to be done. They have done their best to keep the price of the iPad 2 down, but now that Android tablets are now finding their way in the market, things are set to get a whole lot tougher.

We can expect to see the price of Android tablets go down once they start eating into iPad sales, which is already happening. Adoption of Android tablets has been slow, but the likes of the Xoom and the Galaxy Tab 10.1 have been helping. It is still early days for this mobile OS in this market, but we can expect a turnaround in 2012, which is the main reason why Apple needs to reduce costs any way they can.

iSuppli recently broke down the cost of materials for the iPad 2, and came up with $326.60 for the 32GB GSM version. This is more expensive that the original iPad, but this was to be expected with the more powerful A5 processor and camera integration. If Apple were to carry on the way they were going, then they would have had to pass on the price increase to their customers, something that they do not want to do.

We have seen how Apple has managed to cut costs in a number of areas to reduce the price of the new MacBook Air, which should help sales. Some will say that Apple can still lower prices even further, as profits are up even higher than expected. Maybe we will not have to wait as long as we think to see the price of the next iPad, as there are rumors that the iPad 2 HD will be with us later this year; watch this space.

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