With a display-centric mindset, you’d be forgiven for thinking that the manufacturing costs of OLEDs are going to cause price rises in Apple’s products. That may be true to some extent—Apple doesn’t shy away from pricing its products at the top of the range in any category—but it is never going to be as bad as it would be for other companies.
Let’s take the case of the iPad Pro, as an example. Korea’s The Elec, never a dull Google translate moment in there, says that the cost of the OLED panels on next year’s iPads will drive their prices up by 60%. The company’s sources, whoever they may be, are saying that LG Display and Samsung Display are pricing their panels at around $270 for the 11-inch iPad Pro, and $350 for the 12.9-inch iPad Pro. That would drive the price of those two devices to $1,500 and $1,800, comparable to a MacBook Pro. So far, so logical. Although it is not clear whether the pricing applies to the base models or not. Just a generic iPad Pro.
There are three bill of materials (BoM) components that will define the retail cost of the next generation of iPad Pros: the display, the processor, and the camera. The camera pricing is tweakable because there really isn’t any new tech there to worry about. The processor pricing is very tweakable, because it is all Apple’s own silicon, and the display pricing is less tweakable, but very tweakable because the first production runs are going to be for volumes that no one else can deliver, even on mature lines.
The second factor at play here is that Apple is mixing up its supply chains meaning that it can tweak BoM costs by shuffling around suppliers and manage resources in a way that no other company can match. An M1-based iPad Pro with a 2TB drive is already $1,800. I can tell you that the premium on the 2TB drive is way higher than it should be, so there’s another tweakable component. The company is also shipping its MicroLED iPad Pros in October, with pre-orders starting today.
| Model | Storage | Wi-Fi Only | Wi-Fi + Cellular |
| 11-inch M2 iPad Pro | 128GB | $799 | $999 |
| 256GB | $899 | $1,099 | |
| 512GB | $1,099 | $1,299 | |
| 1TB | $1,499 | $1,699 | |
| 2TB | $1,899 | $2,099 | |
| 12.9-inch M2 iPad Pro | 128GB | $1,099 | $1,299 |
| 256GB | $1,199 | $1,399 | |
| 512GB | $1,399 | $1,599 | |
| 1TB | $1,799 | $1,999 | |
| 2TB | $2,199 | $2,399 | |
| 12.9-inch M1 iPad Pro | 128GB | $999.99 | $999.99 |
Apple can afford to go 10%–15% higher on its prices for the OLED iPad Pros, and it won’t take much of a hit. Maybe a couple of gripes. But if they convince their customer base that there is a noticeable difference in the power and quality of the images on the new devices, they’ll maintain sales and they are going to have the usual set of great profit margins. If, as rumored, the new iPad Pros have M3 chips, the sell to its fanatically loyal customer base is going to be really easy.
We won’t know the actual lineup for Apple’s OLED products until its World Wide Developer Conference (WWDC) in June. We do know that Apple is inching its way toward unifying its tablets and laptops. Apple has been working on Project Marzipan, nee Project Catalyst, with the aim of allowing developers to easily bring their iPad apps to the Mac platform. Apple also has Universal Control, which allows users to seamlessly use their Mac and iPad together with a single mouse and keyboard. Maybe, we have to stop thinking about iPad Pros and MacBooks as separate product lines. We are likely to see both with OLED displays, and we are very likely to see prices go up, but we are not likely to see Apple take a hit on its manufacturing costs or profits. What we are seeing is the blurring of lines between two lines that should be completely separate. But, you have a MacBook OLED and an iPad Pro OLED, and you have a pretty cool setup for any designer on the go, and that’s going to be enough to keep the Apple faithful tuned in, wallets out. Apple isn’t going to be first with OLED laptops or tablets, but it is going to be the first to fully realize volume production in both categories. That should make for a very tweakable BoM.
