iPod nano seen costing 45 US to build

Apple's sixth generation iPod nano costs just a third of its selling price to make, iSuppli estimated in a cost breakdown today. The bill of materials and manufacturing for an 8GB iPod nano reach only $45.10. The device is the second least expensive iPod to make so far, being beaten only by the fourth generation $40.80 nano.

In spite of the touchscreen's seeming cost additions, it's not the most expensive part and should cost $11.50. The 8GB of Toshiba flash memory and 64MB of Samsung RAM are the most expensive at $14.40. An ARM processor at the core, made by Samsung but possibly designed by Apple, should cost about $4.95, and the combination of the Cypress touchscreen controller, Cirrus Logic audio DSP, STMicro accelerometer, Silicon Labs FM radio tuner and Intersil video controller cost just $3.49. The enclosure, power and pack-in components make up the rest of the parts.

Cypress' presence is unique as it has never had a place in an Apple touchscreen device; Broadcom and TI have usually handled iPad, iPhone and iPod touch players. Palm (now HP) was one of Cypress' biggest customers until now, supplying the Pre Plus and Pixi Plus with larger touch layers.

STMicro's accelerometer is purportedly one of the smallest ever seen, at just 2mm (0.08in) across, and plays a strong role in Apple's ability to preserve its Nike+iPod functionality despite the iPod nano being half as large as before.

iSuppli's estimates don't include marketing, research, retail and many of the other costs associated with producing the iPod, making the raw manufacturing cost only a partial picture of Apple's decision to price the MP3 player at $149. It typically prefers a gross margin percentage in the mid-30s, which is higher than the industry average.

by MacNN Staff