Apple Had To Sell A Million iPads In 2010 Just To Cover The Cost Of Advertising Them

As the Apple-Samsung intellectual property trial of the decade unfolds, more and more information about the notoriously private Cupertino company is being made public. Apple CMO Phil Schiller just revealed details about how much the company spends on advertising and marketing, and it’s enormous: In 2008 Apple spent $97.5 million advertising the iPhone alone. In 2009, that rose to $149.6 million, and in 2010 reached $173.3 million. The iPad cost an additional $149.5 million in advertising in 2010 alone. That’s more than $322 million in a single year. To put that in perspective, Microsoft spent $500 million over two years to launch Windows Vista.

Since Apple is thought to make about a 50% margin on the iPad, that means it had to sell just over one million original iPads at the entry price of $499 to simply pay for the cost of advertising the tablet, let alone the cost of developing the device. Apple released the Wi-Fi-only edition of the first iPad April 3rd 2010, and achieved that one million mark during the weekend of May 1st and 2nd. The latest estimates place Apple’s quarterly sales of all type of iPad at 17 million units.

Meanwhile, if Apple makes around $460 per iPhone (including carrier subsidies, less cost of manufacture) then it had to sell merely around 300,000 of them to cover its 2010 advertising cost. The company had over 600,000 pre-orders for the iPhone 4, launched in 2010, and sold 1.7 million in the first weekend.

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