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Latest iPod Shuffle only costs $22 to manufacture

Sam Symons   on 13 April 2009 - 23:43 · 80 comments & 10282 views

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Apple's new iPod Shuffle has had a bit of controversy, ranging from its lack of physical buttons, restricted headphones, to the sheer (lack of) size of the device. This, certainly, isn't going to provide any good free advertising either. According to BusinessWeek, the latest iteration of Apple's smallest iPod only costs a mere $22 to create, but how much does it retail for? $79.

That's right, you're being charged almost an extra $60 to own one of these tiny creations, which to some people is an amount that is unacceptable. The main application chip of the Shuffle, which runs music controlling and other functions, is worth $5.98. To quote iSuppli analyst Andrew Rassweiler, "It's almost like six dollars worth of flash memory tied to some flash and a battery and not much else. It's very basic and downsized." As the BusinessWeek article states, "All told, the cost of the shuffle's components, the headphones, and the packaging it ships in comes to $21.77, according to iSuppli's estimates."

This suggests that, as many people assume, if the markup on this is that high, then others will be the same. For example, for the first iPod touch, manufacturing costs were $147 whereas retail prices were $299.

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(12 replies) #1 ork on 14 Apr 2009 - 01:00
Ahmm.. Apple tax just gets larger and larger.
#1.1 andrewbares on 14 Apr 2009 - 01:14
Yea, Microsoft should use that against Apple in their next Ad
#1.2 PsykX on 14 Apr 2009 - 02:13
I bet all other companies have the same margin profit, or almost equal to
Also, maybe you skipped that :
[/quote]iSuppli's calculations consider only the actual parts of the device and do not include research and development, manufacturing, distribution, and patent royalty costs.[/quote]
#1.3 +Chrono951 on 14 Apr 2009 - 02:23
Its called profit people.
#1.4 Pc_Madness on 14 Apr 2009 - 03:18
ork said,
Ahmm.. Apple tax just gets larger and larger.


It costs MS $4,000AU to do the packaging for Windows Server 2003?

Somehow I doubt that.
#1.5 Xero on 14 Apr 2009 - 03:25
Chrono951 said,
Its called profit people.

Lies! Companies making profits? What is this crazy talk!
#1.6 Chris-Gonzales on 14 Apr 2009 - 05:47
Chrono951 said,
Its called profit people.


Its called not being rich "people"
#1.7 Macalicious on 14 Apr 2009 - 09:07
Pc_Madness said,
It costs MS $4,000AU to do the packaging for Windows Server 2003?

Somehow I doubt that.


Don't you understand - every cd/dvd that is sent out has been personally tea-bagged by Bill Gates and Steve Balmer themselves.
#1.8 thealexweb on 14 Apr 2009 - 10:23
Pc_Madness said,
It costs MS $4,000AU to do the packaging for Windows Server 2003?

Somehow I doubt that.


Vista cost 10 billion USD to make presuming Windows 2k3 took slightly less it doesn't look like a bad deal
#1.9 PsykX on 14 Apr 2009 - 11:13
But putting a Vista DVD in a Vista box with a Vista manual and a Vista serial number doesn't cost a lot more than $10...
Microsoft are thieves!! They should charge $20 for Vista!!!!!11111

Development costs are invisible to the eye, but it's the thing that costs the more and by far if I'm not mistaken.
#1.10 JoeC on 14 Apr 2009 - 11:25
Guys, you're comparing hardware to software. That's thick

Compare it to how much profit MS make on the Zune or something sensible, not some arbitrary bulls*** figure you feel like using for trolling
#1.11 Chris-Gonzales on 14 Apr 2009 - 17:42
PsykX said,
But putting a Vista DVD in a Vista box with a Vista manual and a Vista serial number doesn't cost a lot more than $10...
Microsoft are thieves!! They should charge $20 for Vista!!!!!11111

Development costs are invisible to the eye, but it's the thing that costs the more and by far if I'm not mistaken.


Thats software, not hardware
#1.12 Chris-Gonzales on 14 Apr 2009 - 17:42
PsykX said,
But putting a Vista DVD in a Vista box with a Vista manual and a Vista serial number doesn't cost a lot more than $10...
Microsoft are thieves!! They should charge $20 for Vista!!!!!11111

Development costs are invisible to the eye, but it's the thing that costs the more and by far if I'm not mistaken.


Thats software, not hardware
(8 replies) #2 dewaaz on 14 Apr 2009 - 01:08
so what?

maybe it will force other companies to pull their finger out of their bums and make something NICE for a change (e.g. upcoming Zune HD)

if i made something incredible, i'd charge a crapload for it - and laugh all the way to the bank when after at LEAST five years, no other company in the WORLD was able to make something even remotely as desirable.
#2.1 ork on 14 Apr 2009 - 01:13
dewaaz said,
so what?


if i made something incredible, i'd charge a crapload for it - and laugh all the way to the bank when after at LEAST five years, no other company in the WORLD was able to make something even remotely as desirable.


LOL @dewaaz. IPOD Shuffle verbs; incredible, desierable

Seriously, you need to chill.
#2.2 andrewbares on 14 Apr 2009 - 01:15
A device with no buttons and no way of using standard headphones is desirable?

Idk who would actually buy that shuffle, especially when you're giving Apple a bunch of free money with it.
#2.3 RPDL on 14 Apr 2009 - 01:16
It doesn't matter how nice are the things the other companies offer. People just want something with the Apple logo on it. For the price of that shuffle, I could easily find an mp3 player that has more space and a colour screen.
#2.4 Ji@nBing on 14 Apr 2009 - 03:53
dewaaz said,
so what?

maybe it will force other companies to pull their finger out of their bums and make something NICE for a change (e.g. upcoming Zune HD)

if i made something incredible, i'd charge a crapload for it - and laugh all the way to the bank when after at LEAST five years, no other company in the WORLD was able to make something even remotely as desirable.
You consider the new iPod shuffle "incredible"?!?!?!
#2.5 dewaaz on 14 Apr 2009 - 05:49
omg don't take what i said out of context

what i meant was that people obviously love ipods, and they DO sell well

so yes, the most popular MP3 player in the world MUST be incredible to be so successful.

just cos one r two of you like other things, you can't take away from the fact that the ipod is probably one of the greatest products made in the last 10 years.

deal with it. and profit to the genius(es) who made it.

and no i don't have an ipod... but i respect it for being a wildly successful product - and the fact that no other company can compete in the slightest
#2.6 Chris-Gonzales on 14 Apr 2009 - 05:52
dewaaz said,
omg don't take what i said out of context

what i meant was that people obviously love ipods, and they DO sell well

so yes, the most popular MP3 player in the world MUST be incredible to be so successful.

just cos one r two of you like other things, you can't take away from the fact that the ipod is probably one of the greatest products made in the last 10 years.

deal with it. and profit to the genius(es) who made it.

and no i don't have an ipod... but i respect it for being a wildly successful product - and the fact that no other company can compete in the slightest


Dude, learn to spell.
#2.7 dewaaz on 14 Apr 2009 - 13:37
wtf moron there's ONE spelling error... you're kidding me, right?
#2.8 Chris-Gonzales on 14 Apr 2009 - 17:43
dewaaz said,
wtf moron there's ONE spelling error... you're kidding me, right?


If I were you. I'd read again. This is not my space.
#3 Hidr0 on 14 Apr 2009 - 01:09
there will be pple in line for one of those... thats for sure!...
#4 andrewbares on 14 Apr 2009 - 01:16
Hey, can anyone find out the manufacturing costs on the Zune 80's? It would be an interesting comparison.
(5 replies) #5 virtorio on 14 Apr 2009 - 01:24
I don't understand the point of these articles. No product is sold at production cost.
#5.1 Omen1393 on 14 Apr 2009 - 01:37
You're right however the ipod Shuffle's production cost is much much lower than the selling price in proportion to other products such as their ipod touch.

1st generation Ipod touch production, about $150
1st generation Ipod touch consumer price: about $300
This makes the consumer price 2x higher than the production cost.

Now let's look at the ipod shuffle
iPod shuffle production: about $20
iPod shuffle consumer: about $80
That makes the consumer price 4x higher than the production cost. It's a big profit, enough that it's too much.
#5.2 em_te on 14 Apr 2009 - 05:11
Compare that with a dress sold at Target at $30 which costs $6 to make. That's a 5x profit!
#5.3 dewaaz on 14 Apr 2009 - 05:50
em_te said,
Compare that with a dress sold at Target at $30 which costs $6 to make. That's a 5x profit!


yeh but it's not apple, so it doesn't count. 8-)
#5.4 MaJoR on 14 Apr 2009 - 08:13
Oh?

The PS2, PS3, and Xbox 360 were all sold at a loss when they were first released. The PS3 could possibly still be sold at a loss.
#5.5 C_Guy on 14 Apr 2009 - 15:23
Well then allow us to explain: Apple is taking $57 of your $79 (That's 72% of your money) for advertising, logistics and profit.

Some people like to know how much of their money goes to the product, and how much goes towards Steve's next new boat. In this case it's way over half for the latter.
#6 MtDewCodeRedFreak on 14 Apr 2009 - 01:25
Hmm Mapple Mypods, anyone?
(5 replies) #7 Edrick Smith on 14 Apr 2009 - 01:52
So did we include profit, cost of shipping, cost of advertising, and other fees?
#7.1 $n!pR on 14 Apr 2009 - 02:03
Does it matter? They're charging 4x the cost of the device. Almost as bad as paying $80 for a $10 HDMI cable.
#7.2 Chris-Gonzales on 14 Apr 2009 - 05:53
Edrick Smith said,
So did we include profit, cost of shipping, cost of advertising, and other fees?


Does the shuffle come in a fancy plastic box?
#7.3 vetmarkjensen on 14 Apr 2009 - 09:40
$n!pR said,
Does it matter? They're charging 4x the cost of the device. Almost as bad as paying $80 for a $10 HDMI cable.

Or paying $100 for a $3 CD with Windows on it?

Do so many Neowinians not understand manufacturing and profit?
#7.4 C_Guy on 14 Apr 2009 - 15:25
Yeah all the programming and the cost to produce the code and the support for Windows is $3 per CD.

Apparently there are quite a few who don't get manufacturing and profit.
#7.5 vetmarkjensen on 14 Apr 2009 - 19:30
C_Guy said,
Yeah all the programming and the cost to produce the code and the support for Windows is $3 per CD.

Apparently there are quite a few who don't get manufacturing and profit.

Look up.

The point is over your head.

Manufacturing an item is more than just crapping it out of thin air. You need a factory. There must be machinery designed and programmed to work in said factory. The iPod (or any other item) must be engineered and designed, itself, to even be produced.

C_Guy, I think you are putting me on and are deliberately being obtuse to get a reaction.
(5 replies) #8 Mekun on 14 Apr 2009 - 01:53
My sansa was way better than the shuffle and a lot cheaper. I didnt buy trendy i got my moneys worth instead.
#8.1 andrewbares on 14 Apr 2009 - 02:04
Nice.
#8.2 RAID 0 on 14 Apr 2009 - 02:12
Mekun said,
My sansa was way better than the shuffle and a lot cheaper. I didnt buy trendy i got my moneys worth instead.

+1
#8.3 Recon415 on 14 Apr 2009 - 04:50
Mekun said,
My sansa was way better than the shuffle and a lot cheaper. I didnt buy trendy i got my moneys worth instead.


+2
#8.4 Macalicious on 14 Apr 2009 - 09:10
Mekun said,
My sansa was way better than the shuffle and a lot cheaper. I didnt buy trendy i got my moneys worth instead.


Too bad its bloody slow if you have a large library and didn't use mtp to transfer them to the device. The shuffle is stupid, honestly, if you've got that little music you might as well use a phone or a cd player.
#8.5 ThaCrip on 14 Apr 2009 - 16:22
+1 to the Sansa e200 series comment!

i got a e200 series (e250 (2GB) to be exact with a Sandisk 8GB MicroSDHC card. total space = 10GB) running 'Rockbox' (www.rockbox.org) and it's far superior to any Apple product at a almost dirt cheap price! (and yes, i know some Apple products support Rockbox.. but even if they do your still paying roughly twice the price for the Apple device as you would be for a e200 series device)

Sansa has a user-serviceable battery, a 'standard' MicroSDHC slot (supports up to 32GB with Rockbox. only 2GB (or so) with Stock Firmware) where as Apple dont have either of those to my knowledge.

bottom line = stuff like Sandisk Sansa e200 (v1) are far better than overrated/overprice Apple products.... only suckers buy Apple DAP's (Digital Audio Players) that are not informed and just get it because 'everyone else is doing it' lol (they just assume since everyone else has it that it must be the best. im not saying Apple products are bad but when you factor in cost vs other players they immediately are a turn off to me and most other people that dont have money to burn. even if i did have money to burn i would still not buy them when you can basically get a superior product (i.e. Sandisk Sansa e200 series) at a cheaper price.

p.s. also... Rockbox has it's own USB and Battery Charging now which was added semi-recently to Rockbox.... so you dont even need the original Sansa firmware at all now (it's still there if you need it though by pressing and holding the left button on d-pad when you power it on) ... and now you can directly transfer files to the MicroSDHC card where as before the only way Rockbox could use a MicroSDHC card was to transfer files to the e200's internal memory and then use rockbox itself to transfer from the internal memory to the external memory slot.

Last edited by ThaCrip on 14 Apr 2009 - 16:37
(1 reply) #9 splur on 14 Apr 2009 - 02:34
Mac stuff is overpriced? I never knew!!
#9.1 Chris-Gonzales on 14 Apr 2009 - 05:54
splur said,
Mac stuff is overpriced? I never knew!!



Apple in general is over priced. The seeds that were planted to grow that apple tree that steve jobs took a bite out of cost more then the seads we normally buy.
#10 CentralDogma on 14 Apr 2009 - 02:44
(1 reply) #11 PatrynXX on 14 Apr 2009 - 03:18
Not as bad as what as what the stupid "The Pump" shoe cost to make. $120 for the shoe that was more like $5 to make. and people got killed over those dumb things
#11.1 Chris-Gonzales on 14 Apr 2009 - 05:55
PatrynXX said,
Not as bad as what as what the stupid "The Pump" shoe cost to make. $120 for the shoe that was more like $5 to make. and people got killed over those dumb things


people who spend that much money on clothes are crazzy
#12 timster on 14 Apr 2009 - 03:49
i just dont see the appeal in the new shuffle ... i'd rather just carry around a USB stick with my music on it

people that are gullible and do buy it will probably just put mp3 on that they downloaded from a torrent site and make back what the spent on the $22, sorry I mean $79 iPod Shuffle

Last edited by timster on 14 Apr 2009 - 03:55
(2 replies) #13 +warwagon on 14 Apr 2009 - 04:21
Its called making a profit.
#13.1 Chris-Gonzales on 14 Apr 2009 - 05:56
warwagon said,
Its called making a profit.


of what? owning a peace of plastic with medal and you are focrced to use apples own headphones
#13.2 Macalicious on 14 Apr 2009 - 09:11
Chris-Gonzales said,
of what? owning a peace of plastic with medal and you are focrced to use apples own headphones


Sugar buns - don't like it, don't buy it.

Why don't you run along to your gay hating that you did in RWI - your expertise is in bigotry - not technology.
(2 replies) #14 roadwarrior on 14 Apr 2009 - 04:22
Does iSuppli ever do teardowns of anything besides Apple products? If so, why does Neowin only every publish the Apple ones? Bias much?
#14.1 Sam Symons on 14 Apr 2009 - 04:28
roadwarrior said,
Does iSuppli ever do teardowns of anything besides Apple products? If so, why does Neowin only every publish the Apple ones? Bias much?

The Apple ones tend to be the ones that people are interested in, and I use Apple products and Microsoft products so I'm not biased :p I just thought people would be interested in how much they mark it up, compared to normal. *shrug*
#14.2 andrewbares on 14 Apr 2009 - 05:09
Good answer. People are interested in the Shuffle since it's had such drastic and "crazy" changes like a buttonless approach and "DRM-ed" headphones, etc. It makes for interesting news and debate topics.

It would be interesting to see if other companies are "stealing" our money too. I know that Sony is loosing money on every PS3 they sell, but what about Microsoft and their Zunes?
#15 rhinestoner on 14 Apr 2009 - 05:14
no sir, i don't like it.
(3 replies) #16 Sam Symons on 14 Apr 2009 - 05:20
Additionally, check out Sony's new OLED walkman... $400 for 16gb. That's a bit too much IMO, even for OLED.
#16.1 Chris-Gonzales on 14 Apr 2009 - 05:57
OLED is new, so its bound to cost a lot. New technolgoy allways costs more. its just just apple, its all of them
#16.2 Sam Symons on 14 Apr 2009 - 05:57
Chris-Gonzales said,
OLED is new, so its bound to cost a lot. New technolgoy allways costs more. its just just apple, its all of them

True. I'm excited about the prospects of OLED, though... e-paper!
#16.3 Chris-Gonzales on 14 Apr 2009 - 06:01
Sam Symons said,
True. I'm excited about the prospects of OLED, though... e-paper!


yeah OLED is nice, its soon to replace LCD and later LED (but it may work together with LED, so we'll have both OLED and LED)
(1 reply) #17 ACTIONpack on 14 Apr 2009 - 05:35
If you don't like the that you need to pay 4X of the cost of the product then don't buy it. Apple needs to make a profit on there products. I personal never saw the point of the iPod Shuffle. If you want something small to work out get the iPod Nano.
#17.1 Chris-Gonzales on 14 Apr 2009 - 05:57
or an ipod touch and have more then just music.
(1 reply) #18 Minimoose on 14 Apr 2009 - 06:10
Was anyone really suprised?
#18.1 Chris-Gonzales on 14 Apr 2009 - 17:44
Minimoose said,
Was anyone really suprised?


its the internet. Thertes tons of drama on it
(3 replies) #19 120 on 14 Apr 2009 - 06:10
Who gives a flying f**k what they cost to manufacture they can sell them for how ever much they want to.If you dont like what they cost dont buy one.
#19.1 ACTIONpack on 14 Apr 2009 - 06:22
Why can't Apple sell the product at 22 or even less? It's not far dude!!!
#19.2 Chris-Gonzales on 14 Apr 2009 - 17:45
120 said,
Who gives a flying f**k what they cost to manufacture they can sell them for how ever much they want to.If you dont like what they cost dont buy one.


Woah there. calm down
#19.3 120 on 14 Apr 2009 - 20:14
The reason they dont sell them for $22 is because people will pay $79.I am calm Im simpily saying if you think its to high dont buy.Its not like you have to have one of these players to live or anything.Besides if they are priced to high Apple will lower the price cause people wont buy it.On the other hand if people are willing to pay $79 for it then the price will stand.So at the end of the day Apple may suggest what they would like to get for a said item but consumers are actually the ones that determine the price.So technically its not Apple's fault this product is $79 its the consumers who pay the price for it.

Last edited by 120 on 14 Apr 2009 - 20:20
(1 reply) #20 SniperX on 14 Apr 2009 - 06:26
Hang on, this is actually quite serious. You mean to say, all this time, Apple have been making a profit on these items? They are actually selling them for more than they cost to make? That's not how industry is supposed to operate, it can't be. Surely, a company manufactures an item for a cost and then sells if for equal to, or lower than, that cost.

I for one an disgusted at this startling revelation!
#20.1 C_Guy on 14 Apr 2009 - 15:28
When you're done being disgusted, whip out your dictionary and look up "gouging".
#21 ArKeYa on 14 Apr 2009 - 06:41
Add in also the cost of brand investment.
There's nothing wrong with Apple selling at high prices. Now those buying I'm sure they have their reason.... O.o
#22 JrDZ13 on 14 Apr 2009 - 06:44
Once again. Research and development adds to the total cost.

It's totally reasonable to say that a product is overpriced, but it makes no sense to misconstrue the overall cost of a product based on an incomplete figure.
(1 reply) #23 +Vice on 14 Apr 2009 - 07:39
Last time I checked a DVD disc costs about 0.10p but Microsoft charge £100+ for Vista.
Companies can charge whatever they want. If you don't think the price is worth it then don't buy it simple as that.

Newsflash: Everything is 'Over priced' if companies sold things at the cost of the parts they would have no money in which to re-invest in developing new products.

I think the Shuffle is a waste of money and I think for what you get it costs a lot. Would I buy it? Not in a million years, I'd rather buy a Zune, or a jar of cancer, in-fact yeah the cancer sounds good. I wouldn't want the stigma of owning a Zune.
#23.1 +d4v1d05 on 14 Apr 2009 - 15:53
Vice said,
Last time I checked a DVD disc costs about 0.10p but Microsoft charge �100+ for Vista.
Companies can charge whatever they want. If you don't think the price is worth it then don't buy it simple as that.

Newsflash: Everything is 'Over priced' if companies sold things at the cost of the parts they would have no money in which to re-invest in developing new products.

I think the Shuffle is a waste of money and I think for what you get it costs a lot. Would I buy it? Not in a million years, I'd rather buy a Zune, or a jar of cancer, in-fact yeah the cancer sounds good. I wouldn't want the stigma of owning a Zune.

[troll type="sarcasm"]
Buy an iPod, it's slightly cheaper than the Zune in the long run... Because with the Zune, you'll end up losing your friends, your bank wont lend you money, and you will get beaten up, and the hospital charges will eat you up! All of this because you own a Zune, and people hate you for it... I mean, brown?
[/troll type="sarcasm"]
#24 REM2000 on 14 Apr 2009 - 07:50
News at eleven, that £30,000 BMW did not cost £30,000 to build.

Aswell as the cost of the product, included into that product is the wages for the staff who sell them and transportation costs of getting them to the right people.
#25 jamesyfx on 14 Apr 2009 - 08:07
I think it's well-established that Apple operate with high margin.

So what? A lot of companies do. Let's stop reporting on how much it costs to make something.
(1 reply) #26 liberatus_sum on 14 Apr 2009 - 08:23
Hmm, let me think... Support costs, software development etc; these things don't come free you know. And the obvious point of profit; after all, apple isn't the only one making a profit. Do you really think windoze vista is worth its price tag? be honest lol.
#26.1 C_Guy on 14 Apr 2009 - 15:30
First tell us what this "windoze" product is "lolz"...
#27 craybox on 14 Apr 2009 - 08:40
the average sales hike is always around about 2 1/2- 3 X the product cost, whats the fuss. you wanna see un reasonable price hikes check the cost of jewelry....
#28 Shadrack on 14 Apr 2009 - 16:20
I'm so tired of these "cost to manufacture" articles claiming a particular thing is a rip off because those greedy corporate fat-cats try to sell the device at a profit. The nerve of those ugly despicable people. It SHOULD cost less than the $22 it takes to manufacturer. Apple aught to be ashamed of itself.

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