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iPod Classic to ring till loudly for Apple, analyst says

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Apple's $349 160GB iPod Classic contains $190 worth of components, it has been claimed. While the remaining $159 isn't all profit, it still means the Mac maker does very nicely, thank you, out of every Classic it sells.

The figures come from market watcher iSuppli, which regularly disassembles iPods to calculate how much they cost to make. The 80GB Classic - reviewed here - contains $127 worth of parts and retails for $249, iSuppli said.

On to those bill-of-material (BoM) costs, you've got to add a cut of the software development cost and a share of the money Apple pays for the players to be assembled, packaged, distributed, marketed and sold. Still, the figures point to healthy profits for Apple, and there's nothing wrong with that. It'll subsidise the new, much lower iPhone price very nicely, we'd say.

Interestingly, the previous, 30GB iPod had a BoM of $143, according to iSuppli, so Apple has been able not only to increase its profit margin on the new models, but do so with iPods that offer significantly higher capacities than before.

iSuppli said it reckons Apple will sell 3.1m iPod Classics this year. That sounds a big number, but it's peanuts to the 26m third-generation Nanos and Touches the analyst believes will be purchased by the end of 2007.

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