Shuffle cuts to harm AAPL margins?

Industry watchers today speculated about the possibility of Apple's profit margins suffering, due to the company's decision to cut prices on its iPod shuffle digital music players. Apple has to date sold over 40 million iPods since the company introduced the small players in 2001, and sold more than 30 million units in 2005 alone. American Technology Research analyst Shaw Wu said he was not concerned about Apple's profit margins suffering, according to Reuters. "The price of components have come down more than 70 percent, especially flash memory for the Shuffle," Wu said. "And the price of the Shuffle hadn't changed, so they were making a ton of profit off the Shuffle. So they're passing some of those savings on."

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