There are some loony threads going around how iPad 3 is such let down. Here are some cost increases Apple have absorbed over iPad 2 to make iPad 3 a reality: RAM = 82% Manufacturing = 28% Display = 53% Camera - 300% Processor = 62% Power management = 70% Battery = 40% Total BOM & manufacturing = 16% Retail = 0% Apple could have gone for the easy cheap update with the same BOM ceiling as iPad 2 but they bit the bullet and swallowed the extra costs of the BOM & R&D to deliver the iPad 3. R&D costs are of course exempted from the above. Margins on the iPad were already lower than any other iDevice as it is but this is the most aggressive spec/cost move that Apple have ever made on an iDevice. They have pulled all the stops to make iPad 3 a success.