Slashdot Mirror

← Back to Stories (view on slashdot.org)

Inside the Third Gen iPod Nano

Posted by Zonk on from the peek-under-the-hood dept.

ahess247 writes "When the leaked photos of the 3rd-gen iPod nano first hit the Web it quickly took the nickname 'little fatty,' but fat could be better used to describe Apple's profits on the project. BusinessWeek reports that a teardown analysis by iSuppli finds that it costs Apple only $58.85 to build the 4-gig iPod nano, and $82.85 for the 8GB version. The analysis also reveals some of Apple's suppliers, about which it is usually very tight-lipped. Synaptics is back as the supplier of the click-wheel technology, beating out Cypress Semiconductor which had it previously. Also of note: The same Samsung CPU chip that powers the video and audio in the nano is being used in the iPod Classic as well."

13 of 230 comments (clear)

  1. Call me back... by Poltras · · Score: 5, Insightful

    When you have a better analysis of what it costs to develop the software, the amortized cost of engineering and other non-hardware costs (marketing, managing, distribution, etc) so that we can see a margin. Those numbers (58.84$) are totally irrelevant and only serve to misinform. Sure, you could buy the pieces that price, but for what it's worth...

    --
    Of Code And Men
    1. Re:Call me back... by Jeff+DeMaagd · · Score: 4, Insightful

      The firmware is significantly different from previous generations. It looks to me that they more than doubled the complexity of the firmware relative to the previous nano.

      I don't think that this $59 is the marginal cost even, because the iSuppli numbers don't even include packaging, shipping, average warranty expense, retail mark-up and so on. In the past, they didn't even include the cost of the ear buds.

    2. Re:Call me back... by catbutt · · Score: 4, Insightful

      Their numbers are even less relevant than you'd think.
      They are only irrelevant if you don't know how to read them.

      Companies hire iSupply to help them calculate how much a competitor's products cost, and if iSupply didn't know what they were doing, they'd be out of business by now.

      It's not their fault that dumb readers make naive conclusions.
    3. Re:Call me back... by lazyforker · · Score: 5, Insightful

      The fact that companies hire iSupply doesn't mean that iSupply know what they're doing. Haven't you ever worked in a company that hired "Consultants" that don't know their asses from their elbows?

  2. Re:Wait... by p0tat03 · · Score: 5, Insightful

    You mean that the total cost of building a product is just the sum of its components, excluding research/development, manufacturing costs, shipping costs, and marketing costs? Shocking!

  3. maybe by User+956 · · Score: 5, Insightful

    You mean an Apple product is overpriced?

    That's one way to look at it, in the context of the whole marketplace. Another way to look at it is that they've priced it according to the amount people have told them they're willing to pay. So if it were cheaper, it would be underpriced for that particular offering from Apple.

    --
    The theory of relativity doesn't work right in Arkansas.
    1. Re:maybe by hmbcarol · · Score: 5, Insightful

      Nothing which has been purchased can be overpriced, at least not in that transaction. The buyer weighs the money in one hand and the product in the other. They decided that they wanted the product more than the money. The seller has done the same calculus and arrived at the opposite conclusion. They would rather have the money more than the product.

      Both parties believe they received the "better" bargain or they would not have traded. Of course a wise seller will offer a product at a price they feel will be the most profitable overall to sell at, balancing margin versus volume.

      Nothing has an "intrinsic" value; only the value the seller and potential buyers would assign it. It will vary by person, time, and circumstance. Two people, one recently well fed at a nice restaurant and the other tired from working all day and skipping lunch would value a street venders hot-dog very differently.

  4. Profit margins are irrelevant by Overd0g · · Score: 5, Insightful

    except for Apple ownership. Each person needs to decide if the retail price represents a good value to them personally. If it doesn't, don't buy it. It doesn't matter if it costs Apple 1 cent to manufacture the product. Thus is the nature of freedom. They can ask whatever they want, and you can pay it or not. FYI, the same thing applies to your salary.

  5. Don't Forget by Anonymous Coward · · Score: 3, Insightful

    There's also the retailer's cut. Retailers taking 60% of the final price is not unheard of.

    I usually stop reading when I see "iSuppli."

  6. Shock! Horror! MS Office costs 10c! by EmbeddedJanitor · · Score: 5, Insightful
    It only costs 10c to make a CD that MS sells for hundreds!

    Like parent says, when you buy any electronic gizzmo you're not just paying for the parts. You're paying R&D costs, distribution costs, profit for share holders and the stores etc.

    It is quite common for electronic products to sell for apperox 5x the cost of the raw components.

    --
    Engineering is the art of compromise.
  7. Nonsense. by Estanislao+Mart�nez · · Score: 3, Insightful

    You're not offering offer a fair analysis of an economic situation if you reason about it axiomatically, from an impoverished set of axioms that assume that the parties to every exchange are perfectly rational, that what they value doesn't change by the act of purchasing, and that they possess perfect information. All you're doing is demonstrating that you have an unempirical adherence to the axiom that trade only happens because both parties wanted the trade to happen, and that whenever you see some situation that contradicts it, you will reject the existence or straightforward description of the situation.

    You can always preserve your belief in a given claim by refusing to believe the things that would contradict it.

    --

    Are you adequate?

    1. Re:Nonsense. by radl33t · · Score: 4, Insightful

      Now, I also noticed that you didn't provide any examples of a 'situation that contradicts it'.

      Apparently GPs vocabulary was not the only thing that escaped you. GP gave two important reasons as to why the GGP's claim was nonsense. The economic transactions as you an I know them are not the same as those idealized in economic fantasy land (described by GGP). This is because the fantasy land assumption set is invalid in the real world. Namely 1) The actors are not rational 2) The actors do not possess complete and accurate information. If you extend this to rigid extremes then every 'situation' contradicts the axioms of fantasy land because you will never have perfect information. Ahh the blending of Heisenberg... As for GP's language. I do not think it was overly erudite.

  8. Re:I have one. by DamnStupidElf · · Score: 3, Insightful

    Bah! Why didn't I preview!! Shows! Shows! She likes to watch shows not shoes! What is a TV shoe any way?

    Bah, this is slashdot. We know you don't have a wife and that 'shoes' was a typo for porn!