March 18, 2010

13/04/2009

Hardware

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 ]

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Comments

  1. TwisterMc says:

    People always forget about labor. That’s usually 50% of any total bill.

  2. kate says:

    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…

  3. Justin Rhodes says:

    These Shuffles are smaller than your house key…how much labor does it really take to put some together?

  4. redwall_hp says:

    @Justin Rhodes If I give you the parts, could you put it together?

  5. Alex Jordan says:

    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.

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