New Covers For iPad 2

The new iPad 2 Smart Covers could generate over a $1 billion in revenue for Apple.

I'm estimating that at least 60% of iPad buyers will get one. Based on an estimate of 36 million iPads sold in 2011 and an average price of $48 (70% polyurethane and 30% leather mix), the total revenue for Smart Covers will top $1 billion this year.

I further estimate that with a very modest gross margin of 75% (average cost to produce of $12), the Smart Cover could contribute $777 million to Apple’s gross margins.

Dediu notes that it would be interesting to compare Apple's Smart Cover business with other competitors tablet businesses.

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