El Segundo (CA) – iSuppli has released its latest teardown analysis, estimating the bill of materials for the iPod Classic: While Apple was able to reduce the cost of the player substantially, the feature set and overall price have pushed the original iPod into a niche.

The market research firm believes that the recently introduced redesign of the iPod “Classic”, which reduced the weight of the player and slimmed down its form factor, will make the player more attractive in the market and increase its shipment volume. According to iSuppli, Apple will be able to sell about 3.1 million iPod Classic models this year and about 3.5 million units in 2008.

However, in terms of overall iPod sales, the hard drive based Classic is losing its significance in the iPod lineup: iSuppli estimates that the flash-based Nano and Touch models will hit 26 million units this year and “nearly” 40 million in 2008.

One of the reasons of that shift, according to the market research firm, is the fact that the Classic has a “dated” feature set and its advantage has been reduced to plain capacity, which, however, is fading as flash capacity is moving into an area that is “good enough” for many users.

But if it is storage that is important, the Classic is maintaining what iSuppli describes as a “healthy margin”. In both current models, the hard drives are by far the most expensive components of the player and account in either case for more than half of the bill of materials. The 80 GB drive is estimated to cost Apple about $78 and the 160 GB version is estimated at $140. Summing up, the 80 GB iPod is believed to carry a $127 cost for materials alone; the 160 GB model ends up at about $190, according to iSuppli. These numbers do not include cost factors such as assembly, packaging, delivery, R&D and marketing.

Apple sells the 80 GB iPod for $249 while the 160 GB version is offered at $349.

16GB isn't "Close Enough" to 160GB

Oct 11, 2007 13:17     

"the fact that the Classic has a “dated” feature set and its advantage has been reduced to plain capacity, which, however, is fading as flash capacity is moving into an area that is “good enough” for many users." Oh, really. 16GB for $399 vs. 160GB for $349. It was a no-brainer for me. I went with the 160GB Classic. And it's full...
Larry report abuse vote down vote up Votes: +0

What about just the Touch?

Oct 11, 2007 13:40     

I doubt that it's outselling the Classic on its own. It's capacity/price ratio is just too ridiculous.
sweenish report abuse vote down vote up Votes: +0

yo larry

Oct 11, 2007 15:05     

Yes, 16GB is 'good enough' for the average Joe (or Jane) who buys it for the few hundred songs that they want to put on it (and maybe some pictures or a couple episodes of their favorite TV show). I'm more into technology than just about anyone I know, yet I can easily fit everything I want onto an 8GB drive. Your personal experience doesn't make this article wrong, it makes you part of the niche market they're talking about.

rimbuk report abuse vote down vote up Votes: +0

'Niche Market'

Oct 11, 2007 21:38     

lol; Ipods themselves are basically a niche market.
Will report abuse vote down vote up Votes: +0

iPods are not in a niche market

Oct 12, 2007 07:39     

iPods are not in a nice market. Take a look around your mall, your workplace, even your own home. Everywhere you look, there is yet another iPod. They no longer appeal to a niche group of trendy teens that have to have the best regardless of cost, but rather everyone. Any other MP3 player is in a niche market, iPod's are mainstream. 3/7
Three Sevenths report abuse vote down vote up Votes: +0

What is "Good Enough"

Oct 12, 2007 13:50     

I agree with Larry that the flash-based iPods are nowhere near the best option for us capacity-loving users. Then again, not everyone is part of our technologically advanced sub-family of humans. ;) My mother uses less than 512 MB because she only has songs. My sister has one TV series. My father still uses a gramophone. hmm ... he's in a niche market too. The flash-based iPods are better for the majority of users ... unless they require capacity.

khg report abuse vote down vote up Votes: +0

To each their own

Oct 12, 2007 14:24     

There are people out their that wants their entire lives on their i-pod, and then there are people that just wants whatever is necessary. WTF am I talking about? There are people out there that feels they need 1 terabyte of space on an Ipod, so they can download every single movie, and mp3 into their devices. And there's people like myself, who don't want to watch anything on a 1"-2" screen, and only use it to listen to MP3s (I use a Zen). And would much rather have a lighter and smaller device to carry with them. I'm the consumer that personally wants the smallest, lightest mp3 player on the market. The shuttle is a nice size, granted 1 gig of storage is plenty, but I only like to load up my machine once in a blue moon, so I went for a 6 gig mp3 player and still have 4 gigs to spare. I had bad experiences with HD mp3 players, they can only take so much abuse, and forget about bringing it with you when you paintball, all that running around is going to fubar the player.

Devon M report abuse vote down vote up Votes: +0

160Gb ipod touch?

Oct 12, 2007 15:35     

Would be great if they make a 160Gb iPod touch, I do not care if is not as thiner as the rest of the ipods, I just want some great features as the iPod Touch and the great capacity of the classic.
Viktor report abuse vote down vote up Votes: +0

I'm happy with the new IPOD

Oct 12, 2007 21:00     

I recon the 160gb classic is nice .., and the nano's are pretty cool too, nice for average consumers. But personally I'm not a big fan of the touch, I mean compared to the classic its only got like few random features that arn't even that cool(to me), like getting music on the go, or getting wifi .. isn't that wat ur computer or laptop's for.. u'll be able to see webpages way better
Andrew report abuse vote down vote up Votes: +0

to Andrew

Oct 13, 2007 14:37     

Can you drag a computer or laptop around in your pocket with good battery life? not really. not saying that ipod touch will replace the computer, but its convenience man, thats kinda obvious...
kyle report abuse vote down vote up Votes: +0

To Each Their Own?

Oct 15, 2007 12:28     

I agree, not every needs or wants every thing on their iPod. Some just want to listen to music. Others want more. It is not a 'one size fits all world' since the people come in different sizes. :)
TomLeeM/BigWarpGuy report abuse vote down vote up Votes: +0