$149 iPod nano costs Apple $45.10 to manufacture

Posted by Aharon Etengoff

Apple's sixth-generation 8GB iPod nano - which carries a hefty $149 price tag - reportedly costs Club Cupertino $45.10 (per unit) to manufacture. This adds up to approximately 30 percent of its retail price.

"Instead of piling on features, as so many brands do with their latest products, Apple with the sixth-generation iPod has maintained or even removed some attributes in order to fit the form factor and function desired," iSuppli principal analyst Andrew Rassweiler told TG Daily in an e-mailed statement.

"This has enabled Apple to offer the smallest iPod including a touch screen, while keeping component costs to a strict budget."

According to Rassweiler, Apple managed to significantly reduce the manufacturing price by omitting a camera and using just 8GB of NAND flash memory - the same as the fifth-generation nano.

"Because NAND flash pricing essentially stopped eroding during 2008, and even went up, Apple's policy of doubling of NAND Flash memory content seen from 2005 to 2008 has essentially stalled from 2008 to 2010," he explained.

"And with the move to a touch screen interface, the sixth-generation nano also eschews the click wheel used in previous models - instead implementing an advanced, intuitive interface in a product with a near-wristwatch form factor of just 1.48 by 1.61 by 0.35 inches."

Rassweiler also noted that Apple's "judicious decisions" provided the  sixth-gen nano with enough battery life to play up to 24 hours of music when fully charged.

iSuppli nano breakdown