Gross profit margins are in the neighborhood of 50% for the new iPod according to research firm iSuppli, which took apart a 30GB video iPod and estimated that it costs US$151 to manufacture. The player sells for $299. Arik Hesseldahl has all the details in his latest BusinessWeek column.
As Ars Technica noted when it took apart the 30GB iPod, Broadcom manufactured the player’s video chip, with longtime Apple suppliers PortalPlayer and Wolfson providing the audio processors. iSuppli analyst Chris Cotty said told Mr. Hesseldahl: “Over time, you’ll see more chips that do everything. But now it’s probably ore cost effective for Apple to do it with separate chips.”
Mr. Cotty also noted that Apple’s 50% gross profit margin for the new iPod “is in line with what we have seen with other iPod products from Apple.”
While Apple uses three different suppliers for iPod nano displays, Mr. Cotty pointed out that Apple is using only one, a Toshiba-Matsushit joint venture, for the new iPod’s display. “We know that it is supply-constrained,” he said.
Mr. Hesseldahl concluded: “If this all reads like a detective story, it’s no accident. Apple rarely discloses the identity of its suppliers, and in the case of displays, the suppliers themselves do their best to obscure their identities.”