Apple slims costs of fattened-up iPod nano

Stephen Withers
Wednesday, 19 September 2007 05:22

Your IT - Home IT

Despite the latest iPod nano having a beefed-up specification compared with its predecessor, the cost of the parts that go into it may have been trimmed.

Research firm iSuppli has performed its customary teardown analysis of the new nano, concluding that the parts cost of the 4G model is more than $US13 lower than that of the previous model.

iSuppli's estimate is that the $US149/$A199 iPod nano has a parts cost of just under $US59. Other costs such as R&D, assembly and packaging must be added to get a true picture of Apple's margins, but there is no particular reason to assume they will be significantly higher for the new model. Portelligent, another research firm, has estimated the nano's cost-of-goods sold at just over $US68.

Given that Apple is lively to sell around 25 million nanos in the next 12 months, saving $US13 per unit adds up to something like one third of a billion dollars.

Some savings have been achieved by switching suppliers for components such as the power management chip (previously sourced from NXP, a Dialog part is used in the new model), but others have presumably resulted from the overall drop in prices for flash memory and other items.