HDMI – Apple makes money by separating the iPad from the output

ipadby Ben Fredericson (xjrlokix)

Why didn’t Apple build HDMI into the iPad 2? Licensing issues
[Via Edible Apple]

One of the new features of the iPad 2 is support for HDMI out in 1080p. To take advantage of the feature, iPad 2 users will have to fork over $39 for a Digital AV Adapter. Couldn’t have Apple saved users the trouble and implemented HDMI into the iPad 2 itself?

In short, yes, but monetary reasons in the form of HDMI licensing most likely played a factor in Apple’s decision.


The iPad2 is capable of putting 1080p video out. But to get that on an HDMI TV screen requires one to buy a $39 dongle. It seems likely that Apple did this to save money on licensing.

If HDMI out was available on every iPad, Apple would have to be responsible for licensing fees.  As the article states “If you sell 15 million units in 9 months, that equates to over $2,250,000 dollars – yes two and a quarter million – in royalty payments over a single connector.”

By separating out HDMI to those who buy the dongle, Apple is responsible for royalty payments only for those who really, really want HDMI out. This is sure to be a smaller proportion of the whole.

And since Apple charges $39 for the dongle, they more than make up for the pennies per machine in royalty fees.

A pretty smart business move to make a small part of the audience who wants a specific technology to pay for it.

But if a lot of customers have to buy the dongle, they may wonder why they are having to give Apple so much money for something that would normally cost pennies a machine?

This might be a good decision right now but if HDMI output from the iPad becomes a very important use of the iPad. Apple may have to decide which is better then – charge $39 for something that many people would feel should be included in the cost or eating the pennies per machine cost.

I would expect that Apple will take the $39 now until it sees how many are being bought. After a period of time, it could then include direct HDMI out in a new model, if it wanted to. By that time, the reduced price for parts would make up for the small increase in licensing.