Guts of a 3G iPod Shuffle
iSuppli is reporting that the 3rd gen iPod Shuffle only costs a measly $21.77 to make. Apple is making such a huge profit on these little things. It is only a matter of time before the Chinese manufactures create a cheap clone to the shuffle.
Here’s a break-down of the parts:
- Processor – $5.98
- Storage unit – $6
- Lithium Ion Battery – $1.20
- This leaves only about $9 for the case and screen
“That’s about 28% of the device’s retail price. The smaller the component cost as a percentage of price, the higher the potential profit. This suggests the per-unit profit margin on the shuffle is higher than on other iPod models. The component cost for the first iPod touch released in 2007, for instance, amounted to about $147, or about 49% of its $299 retail price. The component cost of the third-generation iPod nano, also released in 2007, amounted to about 40% of its retail price”
[ Source ]
People always forget about labor. That’s usually 50% of any total bill.
plus R&D, advertising, overheads in the stores… I’m sure they still make a decent profit but you can’t really deduce how “huge” it is from these figures…
These Shuffles are smaller than your house key…how much labor does it really take to put some together?
@Justin Rhodes If I give you the parts, could you put it together?
I have a tendency to listen to this man. http://daringfireball.net/linked/2009/04/13/isuppli-shuffle. This may very well be the component cost, but Apple simply isn’t making that much per unit.