News
iPod touch teardown suggests component cost of $147
By Charles Starrett
Senior Editor, iLounge
Published: Tuesday, December 18, 2007
News Category: iPod
A recent teardown of the iPod touch by research firm iSuppli suggests that the total cost of components for the 8GB model is $147, or around half of the device’s $299 retail price. iSuppli’s Andrew Rassweiler believes that the iPod touch will likely serve as a blueprint for future iPods, saying, “We expect the click-wheel versions of the iPod to wane in favor of touch-screen-based models.” Inside the 8GB iPod touch, iSuppli found around $32 of flash memory chips, supplied by Toshiba, a Samsung-supplied main video-audio chip costing around $13 (along with an additional $12 worth of memory from the chipmaker), and other chips from suppliers including Broadcom, STMicroelectronics, and Texas Instruments. iSuppli also estimates that the device’s touch screen accounts for nearly $44 of the material cost. Overall, the firm expects sales of the iPod touch to fall in between those of the iPod nano and iPod classic, with Rassweiler saying he expects Apple to sell around 8.5 million touches in the first year.
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1
That’s a lot of profit for one item. i wonder how much it costs to make an iphone, I’d imagine it would be around the same as an ipod touch.
Posted by Free iPod Touch on December 18, 2007 at 5:39 PM (PDT)
2
Yeah, but how of the remainder is devoted to research & development and marketing, etc.? I bet it’s a substantial amount.
Posted by Galley in Greenville, SC on December 18, 2007 at 6:11 PM (PDT)
3
The iPhone would definitely cost more to build but how much more is the question.
“Galley” brings up an extremely valid point and that is the fact that research, development and marketing cost a lot of $$$.
Posted by TekSavvy on December 18, 2007 at 11:25 PM (PDT)
4
There’s a lot more to the cost of making something than that of the parts. If you also factor in the manufacturing labor, shipping from overseas, shipping again from warehouse to stores or customers, markup in stores, *and* R&D (all those software developers and designers don’t come cheap!), Apple probably isn’t making all that much on these. (I’d guess it’s more like $10-20 per unit.) I expect the margin on the 16 GB model is higher—that’s usually where Apple makes more, on the non-base models.
Posted by MH on December 19, 2007 at 8:09 AM (PDT)