Apple and Microsoft rake in profits with higher sales margins

Apple and Microsoft rake in profits with higher sales margins

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Research firm IHS has said that US technology giants Microsoft and Apple have garnered the highest profit margins for their tablets, followed by Google and Amazon. Microsoft’s first self made tablet the Surface costs about $267 in parts and labor when its optional keyboard cover is excluded.

The Surface went on sale on October 26, 2012, and is priced at $499, which gives it a profit margin of about 46 percent. The device comes with a 10.6 inch screen and can access the internet only through Wi Fi. The $499 price is for the base model with 32 GB of memory.

With a similar configuration, the Surface makes slightly makes more profit for Microsoft than Apple Inc. did when it released its third generation iPad in the month of March. While Apple’s third generation Wi-Fi-only iPad costs $333 with 32 GB of memory and a 9.7 inch screen, it is retailed at $599 with a 44 percent profit margin for Apple.

The 16 GB base model costs $316 to produce and is priced at $499 for a profit margin of 37 percent. Apple is known for maintaining premium pricing as it is the market leader with its iPad’s and customers do not even mind spending on the pricey devices just for the Apple branding.