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Teardown Reveals Nano Component Changes, Cost Reductions

Research firm iSuppli has torn down the latest iteration of the iPod nano to find hefty component changes.

"The changes in components have resulted in significant cost reductions in the nano design, allowing Apple to offer a product that is less expensive to build and that has enhanced features compared to its predecessor," said Andrew Rassweiler, senior analyst and teardown services manager for iSuppli.


Specifically, iSuppli estimates the bill of materials (BOM) at $58.85 for the 4 GB nano and $82.85 for the 8 GB version. Apple sells the 4 GB model at $149 and the 8 GB model at $199.

As usual, the estimate is limited to the BOM and does not include costs for manufacturing, software, intellectual property, research and development, accessories and packaging. Still, the estimate can provide some insight into Apple's profit margin on a given product.

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58 months ago
Good ol' iSuppli.

Time to wait for a refurb!
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58 months ago

"As usual, the estimate is limited to the BOM and does not include costs for manufacturing, software, intellectual property, research and development, accessories and packaging. Still, the estimate can provide insight to how large Apple's profit margin will be on a given product.

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So the message here is that manufacturing, software, intellectual property, R&D, accessories, and packaging are either minor costs or can be directly inferred from the cost of the components?

All I can tell from this data is that Apple's profits will be somewhere between zero and the retail price less the cost of the components. In other words, still a guess.
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58 months ago
As a shareholder, this is great news. I love to see huge margins.

If I were an Apple competitor, however, this would be incredibly frustrating...I'm sure no one can build these for anything near Apple's price.


All I can tell from this data is that Apple's profits will be somewhere between zero and the retail price less the cost of the components. In other words, still a guess.


You can't tell net profit margin from this info, but you can tell that Apple is building these way cheap, and selling them for a healthy price on the market, so it's safe to say that a good chunk of that ~$100 markup is profit.
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58 months ago
$100 just for parts is great. All other costs will be easily taken care of when these sell like hot cakes.
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58 months ago
My question is: is that cost for a single component? Because otherwise, SINCE Apple purchases millions of components AT ONCE, will get 50% price cuts or even more!!! So, WHAT ARE THE REAL TRUE MATHS???
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58 months ago
Not so sure about a good part of $100,- of profit, but a healthy one yes. It also indicates that Apple's products are indeed competitively priced, and can't really go much lower than they are, given that loads of people will have to be paid their wages, transportation costs, etc within the profit margin. good on :apple:
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58 months ago
saw this houres ago but no prob... yes it seems like apple is going to have big margins at the end of this year!!
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58 months ago
I wonder where they get that price for the NAND. Anyone have any data on how much the 8 GB of NAND cost in the black nano when it was released a year ago? It would be interesting to see how much it has come down in price.
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58 months ago

My question is: is that cost for a single component? Because otherwise, SINCE Apple purchases millions of components AT ONCE, will get 50% price cuts or even more!!! So, WHAT ARE THE REAL TRUE MATHS???


I'm sure they take Apple's discount on flash, and their unrivaled economies of scale, into account.
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58 months ago
I hear the markup on ALL MP3 players is 100%, so the 4Gig wholesale is $75 and the 8Gig is $100...
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