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October 29, 2014

IHS iPad Air 2 Teardown Finds Host of Little Changes

Seems like just about any time there's a new major release in hardware, someone's eager to pull it apart and check out what's going on inside. One of these “someones” is IHS, and this time, its Teardown Analysis Service disassembled an iPad Air 2, filling in those interested on what's going on in the new tablet. While there wasn't exactly a lot to write home about, there were plenty of little changes to note, and this added up to make the iPad Air 2 look like a decent—if familiar—slice of tabletry.

The teardown revealed that the iPad Air 2 isn't much different from the original iPad Air, noting that the hardware costs for the two devices were virtually identical. The teardown notes that the 16 gigabyte iPad Air 2's bill of materials (BOM) runs fully $270, and when a $5 manufacturing cost is added, that goes up to $275. The 16 gigabyte iPad Air, meanwhile, boasted a BOM of fully $269, back in November 2013, meaning that there's a dollar difference between the two, and a good chunk of that dollar can likely be explained by currency fluctuations.

The profit margins for the lower-end iPad Air 2 seem to be about the same as such were for the iPad Air, but that's not the case with the higher-end models. Reports suggest that Apple is selling the 64 gigabyte and 128 gigabyte models for the same prices that Apple was originally selling 32 gigabyte and 64 gigabyte iPad Air models, so throwing in extra memory for the same price is driving down the margins a bit. Meanwhile, there are also what IHS senior director Andrew Rassweiler calls “...a series of refinements compared to the original Air...” included in the iPad Air 2, though even Rassweiler notes that the refinements in question represent “...nothing earthshaking.”.

Indeed, the refinements in question are fairly narrow in scope; the displays are reportedly nearly a match, with the same amount of light-emitting diode (LED) backlighting involved. Since electronics prices commonly drop over time, that means the iPad Air 2's display actually costs somewhat less than the iPad Air's, with the Air costing $90—the touchscreen was $43—and the Air 2 costing $77, with the touchscreen running $38. Meanwhile, a clear upgrade to the processor boosted costs from $18 for an A7X and M7 coprocessor to $22 for an A8X and M8.

With these considerations in mind, it's actually somewhat easy to see where concerns about Apple's innovation are coming from. Though there are new product lines coming out from Apple—the vaunted Apple Watch is set to hit stores early next year at last report—much of Apple's product line is starting to at least look somewhat similar to earlier iterations, and that's not a plus for a company that built most of its fortunes on being a huge market disruptor. Still, though, there's always something to be said for stable, incremental improvement; if every device is just a little better than the one before it, then it makes sense to get the newest one.

However, it's worth wondering just how long Apple can keep trotting out small improvements and doing land-office business over same. Considering that there have already been some stirrings of discontent, it may well be that Apple's ability to polish the apple—so to speak—and bring out comparatively simple upgrades may be losing steam. Only time will tell just what Apple's future looks like, but without some big changes fairly soon, it may be time for Apple's decline.

Edited by Maurice Nagle

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