But the most expensive parts (processor, lcd, batteries, ram, flash memory) are for the most part commodity items. I would imagine Apple has some negotiating power buying huge volumes, but getting them 50-75% cheaper than Samsung?
Apple paid $500M in cash to Toshiba for flash memory in 2009. They invested $3.9B this year in some unspecified manufacturer, reportedly buying them manufacturing equipment and tooling. I'm pretty sure that those cash payments will enable the manufacturers to cut prices because they in turn can pay cash to their suppliers. Without the up-front cash and volume that Apple provides, even Samsung itself probably can't give themselves the same price without losing money. And if they do that, my guess is that Apple might take their business elsewhere, and for Samsung the math should be pretty easy on that one.
Commodity items are not immune to mass production prices. Today Apple is the #1 flash memory user in the world thanks to the ipods,iphones and macbooks airs.
It is not only "negotiating power", it is as simple as making 10 million iPad processors make them more than 10 times less expensive than those that have not sold even a million. Having a semiconductors line(processor, LCDs...) are roughly the same fixed cost if you make 1 unit or a million.
Samsung is one of the few companies that could compete with Apple as the processor design is theirs, have great LCD and ram tech, but they have not a single product that compete with Apple in numbers.
