iSuppli: 3rd generation iPod Nano has cheapest hardware yet

iSuppli Corporation has conducted its usual dissection of the latest product from Apple, concluding this time that the 3rd generation nano is more of a revolution than an evolution of the previous model. The majority of the components in the new compact music player are simply nonexistent in the old nano, and new suppliers have been brought to the table. "The changes in components have resulted in significant cost reductions in the nano design, allowing Apple to offer a product that is less expensive to build and that has enhanced features compared to its predecessor," said Andrew Rassweiler, senior analyst and teardown services manager for iSuppli.

iSuppli's Teardown Analysis team determined that the Bill of Materials (BOM) comes to $58.85 for the 4GB version (retail price of $149) and $82.85 for the 8GB version (retail price of $199). In other words, Apple is selling the devices for more than double their hardware worth, which is exceptional even by Apple's standards. The BOM of the new 4GB nano is 18.5% lower than the $72.24 direct materials cost of the previous version of the nano released in late 2006. The new product has the lowest BOM of any member of the nano line analyzed by iSuppli. However, these values are estimates and do not include costs for manufacturing, software, intellectual property, accessories, packaging or research and development costs.

News source: iSuppli

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