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2GB iPod Nano costs $100 to make - researcher

Flash-based player deconstructed

Market watcher iSuppli has disassembled Apple's iPod Nano and, beneath the shiny but not entirely scratchproof casing, it has found almost $70 worth of assorted chippery.

The 2GB Nano retails in the US for $199. Of that, iSuppli reckons, less that half - $90.18 - goes on components. Chuck in $8 per unit labour costs, and Apple's base margin is a whopping $100.82. You can probably add a little more for software development - they're paid in pizza, no?

iSuppli notes that the player contains PortalPlayer's 5021C audio controller chip, Wolfson's WM8975G codec part and a Cypress CY8C21x34 system-on-a-chip used to manage the input from the device's clickwheel.

PortalPlayer's products have found their way into all the iPods Apple has sold with the exception of the Shuffle series, which use a SigmaTel part - the STMP3550, according to iSuppli, which has presumably taken one of the screenless, Flash-based players apart too.

The clickwheel is believed to be the first one Apple has made itself, dropping former clickwheel supplier Synaptics - better known as a purveyor of notebook trackpads - in favour of a cheaper home-brewed alternative.

The key cost-saving component, however, is the Samsung-made NAND Flash. The 2GB Nano contains two 1GB Flash chips. Assuming claims that Apple has received a big volume discount from Samsung are true, iSuppli said it believes the memory costs $54 in total.

You can find a more basic dissection of the Nano here, courtesy of Ars Technica, but iSuppli's more expensive version ($499 - more than twice the price of the Nano the company took to bits, so Apple's not the only one making nice margins) comes with a much deeper-level analysis of the player's bill of materials (BOM) and other cost data. Ideal, in short, for consumer electronics designers who don't fancy tackling deconstructing the Nano themselves. ®

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