iSuppli: 8GB iPod Touch costs Apple $155.04

According to iSuppli Corporation, Apple Incorporated’s iPods traditionally have been sold at retail pricing that is about twice the level of their hardware Bill of Materials and manufacturing costs. The iPod touch is no exception. The 8GB version of the iPod touch carries a BoM cost of $149.18, based on pricing in October. When adding the iPod touch’s direct-conversion cost of $5.86—consisting of manufacturing, assembly and test expenses, the total cost is $155.04. The 8GB version of the iPod touch sells for $299, meaning the price is nearly double its materials and manufacturing cost, at 92.9% higher. As usual, these estimates are strictly limited to expenses for components and other materials and manufacturing, and do not include costs for software, intellectual property, accessories and packaging, or research and development costs.

The iPod touch likely represents the future of the high end of the iPod line. Click Wheel-interface and Hard-Disk Drive (HDD)-based versions of the iPod are expected to wane in favor of touch-screen and flash-memory-equipped models like the iPod touch. But despite its functional and physical outward resemblance to the iPhone, and the fact that its internals borrow heavily from the iPhone, the iPod touch is no iPhone clone, and has its own unique design,” said Andrew Rassweiler, teardown services manager and principal analyst for iSuppli.

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The guilty is not Apple but bad buyers that spend money on any overhyped products around here, in this case iRiver is way superior in many aspect to Ipod and EVEN sound better (with the default earphone) but people will still buy a overpriced ipod.

Anyways and for the record, Apple products really don't sell really well in comparison with the competitor, for example Iphone sold less that nokia n95.

If iPod wasn't a technical gadget then I would not be surprised at all. 100% markup is not that unusual.

But in tech it is. Look at game consoles. They are sold near cost. Dell can sell a computer for $300. Except for luxury items like huge plasma displays and surround speakers, there is not a lot of markup on tech hardware products.

Unless you're Apple because, well, they feel you should have to pay big dollars for the 'Apple Experience' (The PC experience with a logo on top and half as many mouse buttons)

Usually electronics devices earn no more that 20% (usually 10%). Apple in this aspect is being insolent and arrogant and this action is never good for business.

C_Guy said,
If iPod wasn't a technical gadget then I would not be surprised at all. 100% markup is not that unusual.

But in tech it is. Look at game consoles. They are sold near cost. Dell can sell a computer for $300. Except for luxury items like huge plasma displays and surround speakers, there is not a lot of markup on tech hardware products.

Unless you're Apple because, well, they feel you should have to pay big dollars for the 'Apple Experience' (The PC experience with a logo on top and half as many mouse buttons)

I couldnt agree with you more...

The thing is, that Apple fanboys will continue to pay these high prices, in the belief that it is a better product, or makes them elite.

Is it just me or does the Front Page "News" continue to gradually decline into mindless speculation, arguing, fanboyism and increasingly away from actual "news"?

Come on guys, the quality of posting really needs to be checked, it's getting away from informative and enjoyable to simply pathetic.

graaant said,
Is it just me or does the Front Page "News" continue to gradually decline into mindless speculation, arguing, fanboyism and increasingly away from actual "news"?(

Welcome to Neowin or net in general.

Anonymity breeds stupidity - if everyone online was trackable, identifiable and accountable to what they say and do, a lot of these "tough guys" would keep their quality opinions to themselves. Ah, we can only hope.

exactly. people who think otherwise really need to take their heads out of their asses. I'm not saying iPod > Zune or vise versa. Thats a matter of opinion and personal taste. But people who think a Zune is a steal and an iPod is a rip off need a reality check.

LTD said,
Lack of interest.

That, plus the fact that the damn thing isn't available in Canada. (You and me both, we sure as hell haven't ran into a single soul that can sell it up here without importing it from the States.)

On that same note, the only iPhones up here are also imports and, surprise surprise, they're unlocked. Who knows what Rogers will do to these iPhones once they get their hands on them. Oh let's see, we'll just swap out the media library with this gaudy looking piece of crap Java applet that encourages us to pay for poorly encoded tunes. x)

I'm curious to know, does this company do this for any other companies products or does it just have it in for Apple or something?!

Shock horror - company is in business to make money! More at 11!

This isnt suprising at all, anyone who thinks it is needs to open their eyes... Lots of items in shops have at least 50% markup, Apple sell the iPod to shops who then mark it up 50% probably. Meaning they dont make much when they sell it onto shops.. however yes when they sell direct their profit margins are obviosuly going to be better else there would be no point in them doing so.

whocares78 said,
this is 100% markup if it was 50% theyd be about $225

Its 100% markup on parts if you buy from Apple direct...

The fact is the price is parts Apple buy and cost to assemble... it has also been researched, developed, designed, packaged, shipped around the world, sold to a shop (who then markup 50% at least normally).

If you do the maths and presume shops do markup 50% to get $300, then Apple sell to shops at $200... $155 of this is parts and manufacturing. So this then means Apple researched, developed, designed, packaged, and shipped around the world your iPod for $45, and go a few dollars profit left over.

So whats the big rip off scam everyone is shouting about?


(On a side note using the same above logic if they did sell for $225 and the shop had marked up the product by 50%, Apple would be selling a product to shops for $150.... even if Apple ignored all research, packaging etc. they would still be loosing money on every iPod they sold to retailers.)

plastikaa said,

Its 100% markup on parts if you buy from Apple direct...

The fact is the price is parts Apple buy and cost to assemble... it has also been researched, developed, designed, packaged, shipped around the world, sold to a shop (who then markup 50% at least normally).

If you do the maths and presume shops do markup 50% to get $300, then Apple sell to shops at $200... $155 of this is parts and manufacturing. So this then means Apple researched, developed, designed, packaged, and shipped around the world your iPod for $45, and go a few dollars profit left over.

So whats the big rip off scam everyone is shouting about?


(On a side note using the same above logic if they did sell for $225 and the shop had marked up the product by 50%, Apple would be selling a product to shops for $150.... even if Apple ignored all research, packaging etc. they would still be loosing money on every iPod they sold to retailers.)

before you go on about R&D costs (which include researched, developed, designed, packaged) of the ipods etc, consider first how many have they sold, milions, lets just assume it is 1 million take out shipping which i iwill assume costs like 10 MAX per pod, and your looking at 35 million of R&D (minimum which is spread across a numebr of products, i.e. half the R&D in the iphone is used in the ipods too), hahah yeah right, i work for an R&D company an i can tell you stuff dont cost that much to R&D.

So we have $45 that Apple sees after manufacturing costs ... you have assumed $10 of shipping which leaves $35, now take away a couple of dollars here and there for licensing costs of some of the technology, and other costs and you soon bring that down a little bit more. Remember Apple then have to get profit from this too...!

When you look at the numbers in depth it looks about right for profit imo.

Who complains FCUK make clothes for a couple of pounds in the UK and sell them for £100+ sometimes? No-one.


Im not even a huge fan of Apple or the iPod - I just think its them bashing a company for making profit. If you look at similar products from other companies they probably make just as much.

plastikaa said,
So we have $45 that Apple sees after manufacturing costs ... you have assumed $10 of shipping which leaves $35, now take away a couple of dollars here and there for licensing costs of some of the technology, and other costs and you soon bring that down a little bit more. Remember Apple then have to get profit from this too...!

When you look at the numbers in depth it looks about right for profit imo.

Who complains FCUK make clothes for a couple of pounds in the UK and sell them for £100+ sometimes? No-one.


Im not even a huge fan of Apple or the iPod - I just think its them bashing a company for making profit. If you look at similar products from other companies they probably make just as much.

look at the numbers
Apple is expected to sell 9.1 million iPod touch units if those numebr are corect Apple could make about $1.54 billion in gross profit on FY08 iPod touch sales.

lets half that again, just to get rid of all those litlte things that add up the cost. so yeah they ARE making a lot of profit, especially for a technical product. we all know margins in the tech industry are pretty low

and yeah we ALL know brand name clothes are over priced, but thats not what the article is about

And in other 'news', a bottle of rioja costs 10 euros in a supermarket whilst the same bottle in a restaurant costs 30 euros. Shock!


p.s. the same rioja costs the supermarket almost 2 times less.

People like myself will keep buying Apple's products the same way we buy good wines because they are good.

Seriously, is this a news story or just an option to cause trolling?

so if your buying a bottle of wine to drink at home, do you buy the 10 at a supermarket, or do you drive to the restaurant and pay $30 if your going to use analogys at least use ones that make sense

Not shocking really. Apple has always overpriced their products. I still wub my iMac, my iPod and my iPhone. Soon to be a MacBook owner when the ultra-portable comes out


Word. For $249, you can get a Zune 80. 10 times the storage, a better interface, and built-in radio. All for $50 less. Plus, it's better-looking. Don't succumb to buying a stripped-down iPhone.

Word. For $249, you can get a Zune 80. 10 times the storage, a better interface, and built-in radio. All for $50 less. Plus, it's better-looking. Don't succumb to buying a stripped-down iPhone.[/quote]

You can't compare the zune80 to the touch, if you are comparing to hard drives, then do it to the classic which wipes the floor with the zunes storage. Interface, thats very debatable, and down to personal opinion

I'm not a Mac lover at all. I do like Mac products though. You call it crap, but I like Apple products and sometimes you're going to pay more for products that are so proprietary.

You pay $200-400 for Windows, which I think is overpriced for what you get, so what's the difference?[/quote]

Uhhhh.. one is an operating system, the other is hardware?

RAID 0 said,

Uhhhh.. one is an operating system, the other is hardware?

That isn't the point. We're talking about companies overpricing their products. Microsoft does it, Apple does. Who cares as long as it fits your needs, wants and personal taste?

MightyJordan said,
Word. For $249, you can get a Zune 80. 10 times the storage, a better interface, and built-in radio. All for $50 less. Plus, it's better-looking. Don't succumb to buying a stripped-down iPhone.

I bet the Zune is similarly "overpriced." I think these kinds of articles are dumb because they do not take into account development costs and fabrication costs. Just hardware.

For $249 you can get an iPod Classic 80GB. As to which one is better, i think it is a matter of personal opinion.

Shadrack said,

I bet the Zune is similarly "overpriced." I think these kinds of articles are dumb because they do not take into account development costs and fabrication costs. Just hardware.

For $249 you can get an iPod Classic 80GB. As to which one is better, i think it is a matter of personal opinion.

They also do not take into account marketing, packaging, and support. The guy at best buy who sold you the thing gets a pay check too.

evo_spook said,

You can't compare the zune80 to the touch, if you are comparing to hard drives, then do it to the classic which wipes the floor with the zunes storage. Interface, thats very debatable, and down to personal opinion

Yeah, but once you jailbreak it, the ipod touch can have all the iphone apps, and everything. so wtf should I get a Zune, when I can get an ipod touch, that lets me do 10x more, IRC web browseing, IM, and more.

Hurmoth said,
That isn't the point. We're talking about companies overpricing their products. Microsoft does it, Apple does. Who cares as long as it fits your needs, wants and personal taste?

vista took 7 years to develop, how long tdid the ipod take again (i have to agree with raid on that one) and yeah i never cliamed MS overproced windows, but when i buy an MS game it costs the same as any other game on the market, they dont charge more simply because it is an MS game. if i buy MS hardware e.g. keyboard, mouse it is not more than the rest of the market, however apple stuff is alwasy more expensive than a comparable product, hell if the made games theyd cost twice as much as the rest of the games on the market, but you did hit the nail on the head PROPREITRY, this is the main reason i hate apple and the only reason it is soooo expenisve, people have this false idea that apple stuff is just better because it is propritetry, when in reality, it is not that much differnet to other comparable products, however the propritry nature means it is a lot less flexible.

Hurmoth said,
That isn't the point. We're talking about companies overpricing their products. Microsoft does it, Apple does. Who cares as long as it fits your needs, wants and personal taste?

Problem I find is that OS X is only available on Macs, which are basically overpriced computers. If I have to buy an overpriced OS, fine. But overpriced OS + PC? Where's the win in that?

It's all about choice though. I'd really like my dollar to go a lot further. Don't care a bit whether it's super compact, trendy, or no viruses (or games* for that matter).


* Games I want.

evo_spook said,

You can't compare the zune80 to the touch, if you are comparing to hard drives, then do it to the classic which wipes the floor with the zunes storage. Interface, thats very debatable, and down to personal opinion

How does an 80GB iPod "wipe the floor" with an 80GB Zune with storage? Does Apple have a numeric system different than the rest of the world?

I'm really shocked at some of these Americans slamming a company for exploiting the virtues of their beloved capitalistic market! I mean really, is it only OK for companies to do this if personally like them?

Axon said,
I'm really shocked at some of these Americans slamming a company for exploiting the virtues of their beloved capitalistic market! I mean really, is it only OK for companies to do this if personally like them?

the whole world isnt american !!!