updated 09:55 am EDT, Thu September 22, 2005
iPod nano margins
Market research firm iSuppli says that Apple's , making the extremely thin player as profitable as earlier models of the iPod. The company broke down the 2GB version of the $200 iPod nano and found that it costs Apple just over $90 in materials to build the unit and $8 to assemble it. That leaves a profit margin--before marketing and distribution costs--of about 50 percent, according to a report quoted by BusinessWeek. The analysis also found that Portoal Player supplies the audio chips--much like all previous iPod generations except the Shuffle and that San Jose, Calif-based Cypress Semiconductor was the component supplier for clickwheel technology --at the expense of Synaptics, which powered most of the previous iPod generations.
"That's consistent with the margins on earlier iPod versions and serves as a reminder of what a profit machine the iPod family of products has become for Apple since it was introduced in 2001. Margins on the computer-maker's other products tend to be slimmer. An iSuppli teardown of the Mac Mini found the cost of material and manufacturing on that computer to be about $283, leaving a gross margin of 44% before marketing and distribution costs."