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Teardown: Microsoft’s Surface Is a Bigger Cash Cow Than Apple’s iPad

Microsoft’s profit with the Surface is bigger than Apple’s with the iPad

Nov 6, 2012 10:03 GMT  ·  By
The Surface was clearly designed to compete with the iPad, the report reads
   The Surface was clearly designed to compete with the iPad, the report reads

A teardown analysis rolled out by IHS iSuppli reveals that a $599 (€468) Microsoft Surface has a production cost of only $284 (€222), while Apple spends $333 (€260) to make every single $599 (€468) 32GB third-generation iPad.

This means that almost 53 percent of the final cost of each Surface is actually pure profit for Microsoft, while Apple gets only 44 percent from each iPad sold.

According to the teardown analysis, the most expensive parts of a Surface are the display and the touchscreen that cost $101 (€79), while the cheapest is the camera with an estimated value of $5 (€3).

“In terms of its size, feature set and pricing threshold, the Surface RT is clearly designed to compete with the full-sized iPad,” IHS iSuppli said in the analysis.