iPod Nano Dissected: Build Cost Not Even Half Of The Price
Apple's latest iPod Nano has been taken apart and the results and rather interesting: the build costs associated with the device don't add up to even half of its retail price.
September 20, 2007
“The changes in components have resulted in significant cost reductions in the Nano design,” said Andrew Rassweiler, senior analyst and teardown services manager for iSuppli. The 4GB Nano is 18.5 % cheaper to build than its predecessor, which featured a cost of materials $72.24.
So, basically, Apple is selling the Nanos for twice the level of their hardware BOM costs, which should translate into a very nice profit. As iSuppli points out, this “represents a high level compared to most electronic products.“
Still, there are a few things to be said on Apple's defense. The study doesn't take into consideration actual manufacturing costs, software, intellectual property, accessories and packaging. Research and development costs have also been left out.