As Apple announces its new iPad 2 with upgraded specifications, while maintaining a similar price level as the first-generation iPad, sources from component makers pointed out that their profits from iPad 2 components are limited; therefore, they are hoping iPad 2's strong sales will be able to increase their overall profitability.

Since enhancing a product to feature lighter and thinner shape, while offering stronger performance requires component makers to make more investments in R&D as well as increasing their production cost, Apple's pricing strategy for iPad 2 has halted these component makers' plans for shifting some of these cost to Apple, the sources noted.

Market watchers also pointed out that since Apple has no reason to share its profits to subsidize its upstream partners' increased costs, the upstream component makers will only see their profits shrinking in the future. Some makers were unwilling to join Apple iPad 2's supply chain because of the limited profitability.

However, the component makers pointed out that they are still cherishing the opportunity of working with Apple and will work to increase their yields to bring up their profitability in the future.