Teardown Reveals 41.6% Markup for New iPod Nano
While the top-of-the-line 8 GB Apple iPod nano still retails for $199, the completely revised new model costs Apple about $7 less to build than the previous edition, based on a preliminary teardown analysis by iSuppli. With a bill-of-materials at $82.85 per unit, according to iSuppli's estimate, Apple enjoys a nearly 42% markup in retail price.
Of course, that's not the company's wholesale margins for its resellers, though a great many units are sold through Apple Store outlets and through Apple.com - where it can feel the full benefit.
Though iSuppli has yet to reveal the full report, the company's announcement this morning is that its reverse engineers discovered a very, very different system on the inside than the previous generation. Gone are parts from NXP Semiconductors and Cypress Semiconductor (which provided the display for the previous model), and in their place are parts from, among others, Synaptics (which makes a triumphant return), Dialog, Intersil, and for the first time, Micron Technology.
That latter discovery came as a shock, especially because "Micron" appeared emblazoned on the nano's NAND flash memory. Samsung was believed to have scored a major coup with the previous generation nano, by providing its NAND flash along with core semiconductors at a bundled discount. But this time, while Samsung remains the supplier of the key SoC chip (estimated Apple cost: $8.60 per unit), Houston-based Micron gets the prize by supplying the most expensive part: 8 GB of flash at an estimated $48 cost per unit, or 4 GB at $24.
In a statement this morning, iSuppli senior analyst Chris Crotty said he estimates total iPod nano shipments this year (including the previous models) to reach 23 million, and to keep climbing to 27.9 million throughout next year.