Microsoft Surface Tablet vs latest iPad vs Google Nexus 7; which one makes their manufacturers the most money?

by: Joe HindyNovember 7, 2012

Microsoft Surface
The tablet market has exploded over the last year. What began as a niche market with expensive tablets has evolved into companies making tablets that people on budgets can afford. We went from $700 tablets to $300 seemingly overnight. The kicker is that the $300 tablets are still amazing pieces of technology. With such low prices, it brings one to wonder which tablet actually makes their manufacturer the most money. So let’s take a look at the flagship devices from various mobile operating systems. The iPad, the Nexus 7, and the Microsoft Surface.

According to IHS, the Nexus 7 costs $152 to build. That’s pretty cheap compared to the others. However, the Nexus 7 also sells for less than the others. With the $199 model and the $249 model, the Nexus 7 brings in anywhere from a $45 to $100 profit.

IHS puts the cost of the iPad from $316 to $408 depending on which model you buy. For the 16GB WiFi model, the price is around $500. So the profit made from that is just under $200. For the 64GB WiFi and 4G model, they make about $300.

When we first wrote about the Microsoft Surface, it was estimated that the cost was $271. However, back then we believed the tablet would go in the $300-$400 range. We were mistaken, as the Microsoft Surface currently goes for around $700 for the 32GB model. IHS has a new estimate that the Microsoft Surface costs $284 in total. That means that the Surface makes over $400 per sale.

So the Microsoft Surface makes the most money per tablet?

According to current prices on Google and IHS, yes. Each company does go at it from different angles, though. Google and their Nexus tablets aim more for Google cloud services like Google Music and Google Drive. The cost of those to the consumer helps make up for the really cheap prices.

The Microsoft Surface tablet and the iPad are direct competitors. Same price range, same relative tablet features and specs. Where Microsoft wins is the cost of materials. While the Microsoft Surface costs $280 to make, the lowest range of iPad costs $300, with the most expensive model putting Apple back $400 a piece.

So the question really is, which company has the best strategy? iPad and Microsoft Surface tablets go for luxury value. Google goes for the more financially frugal among us, but gives us limited storage to push their other services. Who does it best? Let us know what you think in the comments.

  • Mike

    Good info

  • satsmine2k4

    Confirms MS and apple are both blood suckers and google’s on our side…

    • mjolnirxz

      at least with surface its actually more than a shiny toy, you can use office (included) thats a huge plus. USB host? can plug in your own keyboards etc. I think its much better value than apple

    • 4Dz

      but, the reason google prices its products so cheap with little memory in one term is a bargain, but google as a company has a thing for gathering all the information of their users as they can, which is kinda freaky, i want my information with me, i dont want the google option for being the only option to store my information, its like ther pushing for everyone to give thoir nformation to them or thie products are pretty useless without them…

      • Conner Rhoads

        You don’t think Microsoft and Apple do the same? At least Google is on record PROTECTING people’s rights to their own information. There’s been plenty of cases where governments said “Ok Google, we want that users info” and they said “Pound sand, we’re not giving it to you”.

  • M$

  • Terry Lee

    I could give a rats patooty who makes the most. Nexus 7 best tablet and best price. Win for me!

  • There completely different devices, nexus 7 is very portable, you can carry it in your pocket whereas surface and iPad are great for home use.

    What people forget about the nexus 7 is you can connect memory sticks with a micro to USB adapter for extra memory if you don’t like using cloud services.

  • Eleanor Gossett

    Your articles are very well written and unique.