Third-gen Shuffle Apple's most profitable iPod
updated 09:35 am EDT, Mon April 13, 2009
iPod shuffle 3G teardown
On a per-unit basis, the third-generation iPod shuffle may be one of Apple's most profitable products, says iSuppli. The research firm observes that even when factoring packaging and headphone costs in with those of the actual player components, a modern Shuffle costs approximately $21.77 to produce, or just 28 percent of the retail cost. By comparison, 49 percent of the first-gen iPod touch's $299 retail price was swallowed up by component costs.
The insides of the Shuffle are described at extremely minimal, essentially only flash memory connected to a battery and a controller chip. The design is thought to be most beneficial to Samsung, whose 4GB of memory costs $6, and whose controller chip costs another $5.98. Other components in the player are supplied by On Semiconductor, NXP Semiconductor and Texas Instruments; Samsung's dominance extends to other Apple handhelds however, namely the main processors in the Touch and the iPhone 3G. Some other memory suppliers for Apple may include Toshiba and Hynix Semiconductor.
Dedicated MacNNer
Joined: Sep 1999
Perpetual profit
Earbuds gone bad? No problem, buy another shuffle, keep the earbuds and sell the shuffle for $60 without the earbuds.
The earbuds set costs $30 and is easily breakable. The manufacture cost (% of selling price) of the earbuds is far far less than the shuffle earbuds.
So, at the end, the profit margin is far higher than what people think.