Smart Covers: $1 billion sales, $777 million Apple profit

Apple analyst Horace Dediu of Asymco believes the new minimalist Smart Cover design for the iPad 2 will be a billion-dollar earner for Cupertino. Like most of us, Horace thinks the new covers are a winner and estimates that sixty percent of customers will choose one to go with their new iPad 2. He predicts a 70:30 leather:polyurethane mix to arrive at his billion total. He’s also calculated that the average cost of producing the covers is $12, so that leaves £777 million for Apple’s gross margins. This is on top of his estimated $23 billion revenue from iPads in 2011 and a profit contribution of $7.7 billion. The Smart Cover will therefore add four percent to sales and nine percent to gross profits. Another brilliant idea out of the blue from Apple, it seems.