Tim Cook: Why the iPad mini Costs a Bit Too Much (for Now)

Available now for pre-order, the iPad mini from Apple should have cost a tad less, according to people who are familiar with the company’s supply chain hurdles. Apparently it’s the display that’s forcing the company to set people back $329 in America, and €329 in European territories.

During the company’s quarterly earnings call yesterday, Apple CEO Tim Cook said “When we set out to build it, we didn't set out to build a small, cheap tablet. We set out to build a smaller iPad that offered the full iPad experience.”

He said, “the iPad mini has higher costs and gross margin is significantly below our corporate average.”

“Height of the cost curve, but we want to make a large number and we're going to work to try to get down the cost curve and get more efficient with manufacturing as we've done with our other products,” Cook added, according to a rough transcript of his talks with analysts at the conference.

Coincidentally, around the same time DigiTimes was reporting that “The US$329 price tag for Apple's iPad mini is largely due to low yield rates for the device's GF2 (DITO film) touchscreen technology, according to industry sources.”

The sources reportedly noted that “the DITO film sensor is having mass production issues, which has been a big contributor to why the device is approximately 40-50% more expensive compared to other 7-inch tablets that have OGS or G/G structures.”

DigiTimes is well known for its ties to Apple’s supply chain and the people who have access to vital information regarding its upcoming products. That’s not to say the publication isn’t off sometimes, but its intel has generally been accurate.

Back to Cook’s statement, the CEO also said, “One of the things we try to do is to create a product that people will love for months and years and continue using. That's what iPad Mini is designed to do.”

Providing some figures, he said that over 90% of the web traffic recorded from tablets is from Apple’s iPads.

“Apple will not make a product that somebody may feel good about for the moment, but then won't use when they get home. That's not the experience we want our customers to have,” he noted.

Cook ended his plea by encouraging analysts to pick one up and use it, suggesting that they’ll probably end up buying one too.