Report: Newest Apple iPod Nano Cheaper to Produce

Apple Inc.'s (AAPL) newest version of its iPod nano is the second-cheapest to produce out of the six generations of the media players, increasing the likelihood that the new product will boost profits for the computing and media-player giant, according to a report released Monday.

The sixth-generation Nano costs $43.73 in materials, making it the second-cheapest nano only to the fourth-generation version, which cost $40.80 in materials, research firm iSuppli said in a statement today. Apple was able to cut costs by eliminating the camera that was in the previous version and keeping the amount of memory on the device the same.

"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," said Andrew Rassweiler, director and principal analyst and teardown services manager at iSuppli, in the statement.

With the cost reduction, Apple will likely expand the Nano's gross margin (the price minus the cost of goods) beyond the 67% threshold averaged since the introduction of the third-generation Nano device, according to iSuppli. Apple started selling the new Nano at a base price of $149 on Sept. 1.

Apple hopes to reinvigorate demand for its iPod line, whose unit sales for the quarter ended June 26 fell 8% from a year earlier to 9.41 million, Apple said in July. Overall, Apple's fiscal third-quarter earnings jumped 78% to $3.25 billion on a record $15.7 billion in sales, largely stemming from iPhone and iPad sales.

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Sarah

no wonder why theres no speaker on this ipod nano like the last version.. i wish they woulda spent just a litttttle more per nano to give us a speaker. its all about the profit i guess..

September 28 2010 at 11:03 PM Report abuse rate up rate down Reply
purleyaddicted

Cd's and dvd's are still in the dark ages, what music, and movies need to be on is mega bite cards like sony ps2 system. All mp3's have almost the technology, instead of making a music card to dl on fom a site, why don't new technology just make a mega bite card as small as a postage stamp and upload from that to an mp3. All mp3's play your vids, and music why not make them the worlds smallest cd and dvd player with no more plastic cd's, or dvd's that will scratch. This technology is out there, Let's get rid of plastic cd's and dvd's that scratch once and for all.

September 28 2010 at 8:57 PM Report abuse rate up rate down Reply
jonny13415

so they can make it for about 50 dollars and theyre still gonna sell it for 150?? apple is sh*t!

September 28 2010 at 8:52 PM Report abuse +3 rate up rate down Reply
1 reply to jonny13415's comment
qzephyr

It cost $50 to make, they need to make profit if they're going to continue to exist.

September 29 2010 at 1:40 AM Report abuse rate up rate down Reply
sharp914

well lets see duh there made in china thats why there cheaper to make.

September 28 2010 at 8:22 PM Report abuse +4 rate up rate down Reply
1 reply to sharp914's comment
LionWoods

please....it's "they're" NOT "there"

September 28 2010 at 10:30 PM Report abuse +2 rate up rate down Reply
SUPERSTAR

i think it sucks!....way too small,you have to look at it to see what song you want next,fingerprints all over the screen. the click & scroll wheel is what made the ipod nano unique and great! the new nano is simply an advanced version of the shuffle

September 28 2010 at 4:24 AM Report abuse +2 rate up rate down Reply
xiaoa

the new ipod nano is so beautiful ! it is so cool that wearing like a watch. i will get it and download a Aneesoft free ipod video converter at the same time. http://onlineprnews.com/news/63990-1285555496-aneesoft-video-converter-supports-new-ipod-touch-4.html

September 27 2010 at 10:50 PM Report abuse -2 rate up rate down Reply