Originally Posted by SolipsismX
So you think miniaturized components cost less than larger components because they are in a smaller package? Got it! Unfortunately your Fun-Sized Snicker scenario has never been the case with CE and computers. You've never wondered why a Notebook of a certain performance costs more than a Desktop of a certain performance? When you do you'll need to rethink your hypothesis that being smaller means everything is cheaper. As previously noted the iPhone is more expensive than the iPad for a given capacity, something people outside the US who have to pay full price for their products are intimately aware, yet by your thinking the iPad should cost 8x as much.
Margins start at 23% on iPads, they start around 50% on iPhones. iPhones have full cell technologies, which are patent encumbered. So this is a BAD (Orange-vs-Bananas) comparison.
Compare current Wifi iPods and Wifi iPads. Those are Orange-vs-Orange comparisons.
This also isn't a PC vs Notebook comparison where you are using overpriced notebook processors ( a largely artifical distinction that pads Intels pockets), or Physical HDs where the bigger size of 3 1/2" drives allow lower density tech.
Those are some very specific cases where component costs are higer building smaller devices, but they are not universal, and don't apply here because those components aren't used. You can't just take some specific cases and apply it generally everywhere. That doesn't make sense. You need to actually look at the specifics in each case, if you want a reasonable assessment.
In this case we have the exact same RAM/SoCs/Storage technology, so no difference, same cost.
The only items that change:
Battery: Same technology, you just need 4 times as much battery, so nearly 4 times the cost.
Case: Same technoloyg, you just need >4 times the material, so nearly 4 times the cost.
Display: 4 times the size of all the layers involved. These will cost close 4 times as much. The actual increase in density will cause a premium but that is more like 10%-20% vs 400% increase for size. So closer to 4x/1.2x = 3.3 times the cost.
Once you actually look at the specific components involved, instead of blindly shouting "miniaturization cost more", it should be obvious that a bigger iPad is going to cost more to produce than a smaller Touch.
Edited by Snowdog65 - 10/20/12 at 3:25pm