New models give Apple best margins ever
vnunet.com, 20 Sep 2007
Analyst firm iSuppli has taken apart the new iPod Nano and found that it gives Apple its biggest gross margins yet.
The build costs for the new Nano run to $58.85 for the 4GB model priced at $149, and $82.85 for the 8GB version priced at $199. This makes it the most profitable iPod in Apple's history.
"The changes in components have resulted in significant cost reductions in the Nano design, allowing Apple to offer a product that is less expensive to build and that has enhanced features compared to its predecessor," said Andrew Rassweiler, senior analyst and teardown services manager at iSuppli.
Overall the study found that Apple typically charges around double the manufacturing cost of its products, but that the new line retails at around three times the build cost.
The teardown showed that the new 4GB Nano is 18.5 per cent cheaper to build than the previous model.
The estimate does not include costs for manufacturing, software, intellectual property, accessories and packaging.
The figures also do not include research and development costs, since such data cannot be derived from a teardown and component analysis.
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