Materials cost for Apple's 4GB iPod nano estimated at $72

[AppleInsider]

A dissection of Apple Computer's new 4GB iPod nano digital music player conducted by iSuppli reveals a new design that delivers reduced cost and greater capability compared to the previous-generation player.

As expected, one key change to the design is the addition of a new Samsung Electronics-made System-on-Chip (SoC) that replaces the previous semi-custom PP5021 SoC from PortalPlayer Inc. The new design also features several new customized chips from previous nano suppliers: Wolfson Microelectronics plc for the audio codec and Philips, now called NXP Semiconductors, for power management, the firm said.

Samsung SoC highlights nano chip content

According to iSuppli, the Samsung SoC, which is based on an ARM Ltd. microprocessor, includes a flash disk controller -- a function that previously was implemented in a separate part from Silicon Storage Technology Inc. The firm estimates that the Samsung SoC costs $5.40 compared to a combined cost of $8 for the previous PortalPlayer and SST parts.

In selecting two other key semiconductors for the new iPod nano, iSuppli said Apple apparently sought size and power reductions. The Wolfson audio codec, the WM8750S, is said to be a custom, smaller-packaged version of the company's standard WM8975G used in the first-generation nano. Likewise, the firm said, the Philips PCF50635 power-management IC used in the new design is a smaller-die version of the company's standard PCF50607 employed in the original nano.

Otherwise, the new nano utilizes several of the same semiconductors as the first-generation design. These parts reportedly include Cypress Semiconductor Corp.'s Programmable SoC (PSoC) microcontroller and its CapSense technology that last year replaced Synaptics's technology as the circuitry behind the player's characteristic ClickWheel interface.

"Due to design changes and component price declines, iSuppli estimates that Apple has reduced the Bill-Of-Materials (BOM) cost for the new $199 retail-priced 4Gbyte nano to $72.24, less than the $89.97 that was estimated for a first-generation 2Gbyte nano upon release,” wrote Andrew Rassweiler, teardown services manager and senior analyst for iSuppli.



Where's the video?

iSuppli said that the use of the Samsung SoC was expected, but the lack of video support in that chip -- and in the new nano overall -- is somewhat surprising given that Apple rivals, most notably SanDisk, are moving quickly to add video capability to flash-memory-based players.

"That lack of video support also may partly explain why the new hard-disk-drive based iPod continues to utilize the same combination of PortalPlayer and Broadcom Corp. chips," the firm said.

iSuppli also conducted an analysis of the new video-enabled, hard-drive-based iPod and concluded that it had no design or supplier changes compared to the previous version, except for a brighter display. The firm said this represents a cost-effective way for Apple to remain competitive pending the release of more innovative products.



"At a minimum, Apple needed this minor product refresh to support the launch of iTunes movie downloads and to prepare for the introduction of Microsoft Corp.'s competing Zune player. But the latest iPod falls very short of being a true video-centric player needed by consumers who want to watch movies, and not just short-form video," wrote Chris Crotty, a senior consumer electronics analyst at iSuppli.

Crotty noted that the third-quarter timing of the launch will keep the market guessing, since Apple still could launch additional new iPods before the holiday season. "Apple also could hold its new introductions until the release of its previewed iTV device, which will enable playback of iTunes video content on televisions through a wireless link," he added.

iSuppli believes Apple's delay in adding video to its flash-memory-based based players and its launching of a new design for its flagship iPod suggest that the company is shifting its focus from portable MP3 players to the living room. Such a shift, it said, also could signal Apple's confidence in its leadership position within the MP3 player market.

Later on Wednesday, AppleInsider will cover a separate iPod nano teardown, complete with images.

[ View this article at AppleInsider.com ]

[Robin Hood]

As I've said before, this is fine as long as people realise that materials alone don't make a product. You've gotta design it, manufacture it, distribute it, market it and sell it. All of those things cost money. A lot of money. And than there are unexpected costs and risks, such as product failures (gotta replace the product for free).

I'm not saying Apple isn't making some money on these, of course they are. I'm just saying materials are only part of the cost.

[macFanDave]

Originally Posted by Robin Hood

As I've said before, this is fine as long as people realise that materials alone don't make a product. You've gotta design it, manufacture it, distribute it, market it and sell it. All of those things cost money. A lot of money. And than there are unexpected costs and risks, such as product failures (gotta replace the product for free).

I'm not saying Apple isn't making some money on these, of course they are. I'm just saying materials are only part of the cost.

1) What is the retail price/cost of materials ratio of other electronic devices? What about other consumer items? I'll bet if you looked at that ratio for clothing, you'd go bonkers!

2) The cost of materials is one part of the minimum price that a company can sell a product for. It could be sold for less, but not on a sustained basis. Above that, the price that such a discretionary product sells for is controlled by Adam Smith's "Invisible Hand." As long as Apple sells iPods at a rate that is close to how fast they make them, the price is right. In fact, it may be too low.

It's fun to see what the guts of iPods are and how much they cost, but it is pretty useless information unless I want to make the iPod- and Zune-killer!

[Tazznb]

Originally Posted by macFanDave

1) What is the retail price/cost of materials ratio of other electronic devices? What about other consumer items? I'll bet if you looked at that ratio for clothing, you'd go bonkers!

2) The cost of materials is one part of the minimum price that a company can sell a product for. It could be sold for less, but not on a sustained basis. Above that, the price that such a discretionary product sells for is controlled by Adam Smith's "Invisible Hand." As long as Apple sells iPods at a rate that is close to how fast they make them, the price is right. In fact, it may be too low.

It's fun to see what the guts of iPods are and how much they cost, but it is pretty useless information unless I want to make the iPod- and Zune-killer!

Reliable / easy - to - use, aesthetics, etc are actually worth a lot.

I bet Apple spends about triple to quadruple of what the other companies are even willing to spend for advertising.

It's the advertising that puts the products into the mass' minds (as Microsoft will soon prove that you can sell trash with enough advertising once Zune hits the shelves)

[purpleshorts]

Words are free. Does that make this article worthless?

[Kolchak]

Originally Posted by AppleInsider

iSuppli said that the use of the Samsung SoC was expected, but the lack of video support in that chip -- and in the new nano overall -- is somewhat surprising given that Apple rivals, most notably SanDisk, are moving quickly to add video capability to flash-memory-based players.

Why would anyone want to watch videos on a nano? Watching anything is already too hard on the full-size iPods with their 2.5" screens. I can't imagine trying to watch videos on the 1.5" screen of the nano. I've seen bigger postage stamps.

[mark2005]

"iSuppli believes Apple's delay in adding video to its flash-memory-based based players and its launching of a new design for its flagship iPod suggest that the company is shifting its focus from portable MP3 players to the living room. Such a shift, it said, also could signal Apple's confidence in its leadership position within the MP3 player market."

I hope Apple's confidence doesn't really mean complacency in the MP3 player market. There is still quite a lot that Apple could do with the iPod. For example, adding communications (bluetooth, wifi, or cellular) is one huge area. I understand that the balance of technology, cost, and power may not make comm the thing to do today but Apple needs to keep innovating.

[Louzer]

Originally Posted by Kolchak

Why would anyone want to watch videos on a nano? Watching anything is already too hard on the full-size iPods with their 2.5" screens. I can't imagine trying to watch videos on the 1.5" screen of the nano. I've seen bigger postage stamps.

Forget watching a video. How much video can you get on a nano. A couple of tv shows, with some music. Not much beyond that. Space wise, it may not have made sense. Add in the tiny screen...

[kresh]

Wow! All those profits.

The corporate world could really make a dent in: http://www.savethechildren.org/emerg...rica/index.asp

But alas, it's all about lining the pocket of the investor. What in the world do these corporations need Billions and Billions of dollars in the bank for? Would the world really come to an end if every corporation pitched in together to end world hunger?

[Ireland]

Normally in industry the retail cost for something is 4 times the meterial cost, so with respect to that the cost of the Nano's is not too bad. Although the electronics industry is somewhat different. The price of the Nano's is less then next year, so that can't be a bad thing.

[Squirrel_Monkey]

Originally Posted by mark2005

I hope Apple's confidence doesn't really mean complacency in the MP3 player market.

This is why the Zune will be a good thing. Also keep in mind that the iPod is run in its own division at Apple. I doubt Apple as a whole will be "complacent" about the iPod.

[Mr. H]

Originally Posted by kresh

But alas, it's all about lining the pocket of the investor. What in the world do these corporations need Billions and Billions of dollars in the bank for? Would the world really come to an end if every corporation pitched in together to end world hunger?

Unfortunately, I believe that if money were the only tool you wanted to use, you seriously under-estimate the amount of money required to permanently end world hunger.

Political change (esp. elimination of corruption in developing nations) is what is needed, and that's difficult to achieve with money alone.

But yes, it would be nice if more companies donated large sums to charity. It would be unlikely to hurt.

[Mr. H]

Originally Posted by mark2005

"iSuppli believes Apple's delay in adding video to its flash-memory-based based players and its launching of a new design for its flagship iPod suggest that the company is shifting its focus from portable MP3 players to the living room. Such a shift, it said, also could signal Apple's confidence in its leadership position within the MP3 player market."

iSuppli revealed today that it does not understand the term "mp3 player". Playing video is not a requirement of a good mp3 audio player. If you want an audio player, you'd have to be a special kind of moron to choose your device based upon its ability to play video.

If you want a video player, would you really want one with a 1.5" screen? Granted, it's possible to have a bigger screen in the Nano and pretty much retain its overall form-factor, but the screen would still be ridiculously small. In order to make the screen worth watching, the Nano would have to become much bigger, thereby obliterating the success with which it achieves its primary purpose: to be a best-in-class portable music player.

[Splinemodel]

Originally Posted by kresh

Wow! All those profits.

The corporate world could really make a dent in: http://www.savethechildren.org/emerg...rica/index.asp

But alas, it's all about lining the pocket of the investor. What in the world do these corporations need Billions and Billions of dollars in the bank for? Would the world really come to an end if every corporation pitched in together to end world hunger?

Not everyone cares about starving children. Besides, have you every heard the "teach a man to fish" proverb? Donating money to the 3rd world is shortsighted. The US and the EU governments make the third world hungry not because of a failure to throw money at the problem, but because of domestic protectionism and pork-barrelling towards the farming industries. Instead, they force the 3rd world to grow non-sustainable crops (like sugar).

As for the iPod, $74 is about what I expected. You have to factor in R&D and marketing into the accounting cost, of course, as well as supply line costs and many other things. But the bottom line is that there's a glut in the NAND market right now. I'm surprised Apple didn't make a 16GB Nano, although that's probably because they couldn't fit the chip package into the enclosure, and not because they didn't think it would fit into the marketing model.

[g3pro]

Originally Posted by kresh

Wow! All those profits.

The corporate world could really make a dent in: http://www.savethechildren.org/emerg...rica/index.asp

But alas, it's all about lining the pocket of the investor. What in the world do these corporations need Billions and Billions of dollars in the bank for? Would the world really come to an end if every corporation pitched in together to end world hunger?

If you really gave a shit about world hunger, you would sell all that you have and give it to the poor, and work for the rest of your life to provide food for the world.

But alas, you're sitting in your nice home, in front of your nice computer, bitching to people on an internet forum.

So shut the f*** up.

[kresh]

Originally Posted by g3pro

bitching to people on an internet forum.

I wasn't bitching at people. I was merely wondering why corporations have to retain such vast sums of money.

I don't give all, but I give 40%.

That's where my nick "kresh" comes from. I'm part of a Christian group that supports the Kresh people of Sudan (in the starving part of Africa). The money we give does not go to a government body, but is delivered to the Kresh people in the form of food stuff and goods. The vast majority are Sunni Islamics, 14% of the population is Christian. Through our help and others, it's starting to show that people of differing religions can live together, although there have been too many outbreaks of violence.

If you would like to read more abouth them: http://www.joshuaproject.net/peopctr...SU&rop3=105305

I didn't advocate that Apple sell everything and give it away. If they gave 40%, that would be nice.

[ecking]

Originally Posted by g3pro

If you really gave a shit about world hunger, you would sell all that you have and give it to the poor, and work for the rest of your life to provide food for the world.

But alas, you're sitting in your nice home, in front of your nice computer, bitching to people on an internet forum.

So shut the f*** up.

i agree that this isn't the forum for a talk about that but what you said is some of the stupidest, most ignorant shit I've ever heard.

How do you know he doesn't anything for charity?

And to be charitable someone has to sell everything they have?

WTF are you smoking?

Hmmmm, I guess even Bill Gates didn't give enough then.

Why don't you shut the f*ck up.

Moron.

edit: see I was right. This guy posted his response while I replied so I didn't see his second comments.

[kresh]

I appologise and will make no further postings along this line. I was not trying to upset anyone, nor bring politics, religion or any other flame generating topic to the thread.

I was just musing , and will not speak of it again.

[minderbinder]

Originally Posted by Kolchak

Why would anyone want to watch videos on a nano? Watching anything is already too hard on the full-size iPods with their 2.5" screens. I can't imagine trying to watch videos on the 1.5" screen of the nano. I've seen bigger postage stamps.

I wouldn't mind seeing it. It would be VERY cool if you could play from a nano to an external screen like the iPod. And a couple movies at a time would be fine, just load up what you want to watch.

Hell, I'd even take video on a shuffle (with external playback).

[ecking]

Originally Posted by minderbinder

I wouldn't mind seeing it. It would be VERY cool if you could play from a nano to an external screen like the iPod. And a couple movies at a time would be fine, just load up what you want to watch.

Hell, I'd even take video on a shuffle (with external playback).

You know what I never thought of that. That would be a clever use for a video nano and could come in handy. Besides if people can watch video on their cell phones I could occassionally watch videos on a 1.5inch screen. Even though the next nano should have 1.8.

[doh123]

Originally Posted by kresh

I appologise and will make no further postings along this line. I was not trying to upset anyone, nor bring politics, religion or any other flame generating topic to the thread.

I was just musing , and will not speak of it again.

Truthfully, most people in the world only care about themselves, and really dont give a damn about helping others. Even some of these still help others, but for their own benefits, such as tax breaks or public recognition

[JeffDM]

I suppose many of the posters here haven't read the discussion on the 5.5G BOMs. Keep in mind that this is just the price of the parts. We get too many "armchair businessmen" that see this and somehow assume that Apple's profit is 50%. It is not. Parts are the biggest portion of the costs, but there are numerous other expenses. To illustrate the point, Apple's typical net profit is about 10%, not 50%.

[Johnny Mozzarella]

Originally Posted by kresh

I wasn't bitching at people. I was merely wondering why corporations have to retain such vast sums of money.

I don't give all, but I give 40%.

That's where my nick "kresh" comes from. I'm part of a Christian group that supports the Kresh people of Sudan (in the starving part of Africa). The money we give does not go to a government body, but is delivered to the Kresh people in the form of food stuff and goods. The vast majority are Sunni Islamics, 14% of the population is Christian. Through our help and others, it's starting to show that people of differing religions can live together, although there have been too many outbreaks of violence.

If you would like to read more abouth them: http://www.joshuaproject.net/peopctr...SU&rop3=105305

I didn't advocate that Apple sell everything and give it away. If they gave 40%, that would be nice.

1"Be careful not to do your 'acts of righteousness' before men, to be seen by them. If you do, you will have no reward from your Father in heaven.
2"So when you give to the needy, do not announce it with trumpets, as the hypocrites do in the synagogues and on the streets, to be honored by men. I tell you the truth, they have received their reward in full.
3But when you give to the needy, do not let your left hand know what your right hand is doing,
Matthew 6:1-3 (New International Version)

Sounds to me like your just looking for an excuse to toot you own horn.
I can't know for certain what your motives are but you-know-who can.
Check yourself.

[melgross]

Originally Posted by Splinemodel

Not everyone cares about starving children. Besides, have you every heard the "teach a man to fish" proverb? Donating money to the 3rd world is shortsighted. The US and the EU governments make the third world hungry not because of a failure to throw money at the problem, but because of domestic protectionism and pork-barrelling towards the farming industries. Instead, they force the 3rd world to grow non-sustainable crops (like sugar).

As for the iPod, $74 is about what I expected. You have to factor in R&D and marketing into the accounting cost, of course, as well as supply line costs and many other things. But the bottom line is that there's a glut in the NAND market right now. I'm surprised Apple didn't make a 16GB Nano, although that's probably because they couldn't fit the chip package into the enclosure, and not because they didn't think it would fit into the marketing model.

Battery life as well.

[Buck]

Hmm... what about the battery though? Apple claimed iPod with video now would play longer. iSuppli says everything is the same except the screen. Question is, how can you only install a brighter screen and increase the battery life dramatically?

[Zandros]

Originally Posted by Buck

Hmm... what about the battery though? Apple claimed iPod with video now would play longer. iSuppli says everything is the same except the screen. Question is, how can you only install a brighter screen and increase the battery life dramatically?

Perhaps the screen's power draw with active backlight is less, which also explains why it won't affect audio playback.

[melgross]

Originally Posted by Buck

Hmm... what about the battery though? Apple claimed iPod with video now would play longer. iSuppli says everything is the same except the screen. Question is, how can you only install a brighter screen and increase the battery life dramatically?

If you read the article carefully, you have seen that a big deal was made of the fact that the most power consumptive chips are now in more efficient designs, and in one case, two combined into one.

A brighter screen doesn't always mean one that consumes more power. The screen can simply be better, and more advanced. Newer LCD monitors are much brighter than older ones, but use the same, or less power.

[monkeyastronaut]

Originally Posted by Kolchak

Why would anyone want to watch videos on a nano? Watching anything is already too hard on the full-size iPods with their 2.5" screens. I can't imagine trying to watch videos on the 1.5" screen of the nano. I've seen bigger postage stamps.

similar arguments have been made forever and every about new features on ipods. if it wasn't like this we'd still be using 1stGen ipods. "who wants a color screen? why would you want that?" that was the reason i sold my mini and bought a nano.

out there, somewhere there is someone wanting to watch video on a tiny 1.5 inch screen.

[mark2005]

Originally Posted by Squirrel_Monkey

This is why the Zune will be a good thing. Also keep in mind that the iPod is run in its own division at Apple. I doubt Apple as a whole will be "complacent" about the iPod.

Does anyone know if the "iTV" is being developed in the iPod division or the Mac division? If it's in the iPod division, it could detract from the iPod.

Personally, I don't think Apple will be complacent because the slew of patent submissions shows that they are busy thinking ahead of the technology. I'd just like them to work a little faster getting new products out the door.

[g3pro]

Originally Posted by ecking

i agree that this isn't the forum for a talk about that but what you said is some of the stupidest, most ignorant shit I've ever heard.

How do you know he doesn't anything for charity?

And to be charitable someone has to sell everything they have?

WTF are you smoking?

If you're serious about something, go through with everything you have, not with home idiotic, liberal idea of appeasing your conscience by throwing quarters at bums.

[Mr. H]

Originally Posted by g3pro

If you're serious about something, go through with everything you have, not with home idiotic, liberal idea of appeasing your conscience by throwing quarters at bums.

Who said anything about "throwing quarters at bums"? Or is that supposed to be a metaphor?

You really are being an idiot here. Do you really not think that some people can do a lot more net good by not "selling everything they have and working for charity"? To take an extreme example: Which achieves the overall most net good: Bill Gates giving up everything he had 30 years ago and working for charity, or Bill Gates doing what he actually did and now having billions and billions of dollars to give to charity, and decent contacts to help raise awareness in the wider public about various issues?

[furious_]

Originally Posted by kresh

I wasn't bitching at people. I was merely wondering why corporations have to retain such vast sums of money.

I don't give all, but I give 40%.

That's where my nick "kresh" comes from. I'm part of a Christian group that supports the Kresh people of Sudan (in the starving part of Africa). The money we give does not go to a government body, but is delivered to the Kresh people in the form of food stuff and goods. The vast majority are Sunni Islamics, 14% of the population is Christian. Through our help and others, it's starting to show that people of differing religions can live together, although there have been too many outbreaks of violence.

If you would like to read more abouth them: http://www.joshuaproject.net/peopctr...SU&rop3=105305

I didn't advocate that Apple sell everything and give it away. If they gave 40%, that would be nice.

not being rude. do you supply skills and employment to the people you are helping?

i do a ethics and sustainability course at UNI, the thing that pisses me off the most is that charities are fine at what they do best( feed clothe the population ), they neglect the after care. supplying skills and employment to the people. by all means i am not say all that needs to be done is so simple, i am saying your doing a great job. instead of bashing these big organisation with their vast sums of money. ask them to help out. they could provide training, employment and thus one more piece to ending the poverty puzzle.

[Splinemodel]

Originally Posted by melgross

Battery life as well.

NAND is extremely battery friendly, especially when it's not being used (i.e. in sleep mode). Battery life would decrease negligibly. When a 65nm NAND chip is inactive, the power can be measured in nanowatts. Running the display backlight for a second will drain more power than the extra NAND will drain during a full charge cycle.

The other thing that caught me by surprise is the 32MB SDRAM. Caching would seem less important when using solid state non-volatile memory (NAND) rather than a hard disk, but I can't imagine that Apple hasn't already evaluated the prospect of reducing the amount of SDRAM.

[JeffDM]

Originally Posted by Splinemodel

NAND is extremely battery friendly, especially when it's not being used (i.e. in sleep mode). Battery life would decrease negligibly. When a 65nm NAND chip is inactive, the power can be measured in nanowatts.

Does a difference in capacity make any difference in operation? Would 16GB of flash consume noticably more power than 8GB of flash?

The other thing that caught me by surprise is the 32MB SDRAM. Caching would seem less important when using solid state non-volatile memory (NAND) rather than a hard disk, but I can't imagine that Apple hasn't already evaluated the prospect of reducing the amount of SDRAM.

What size is most commonly used in electronics? What is the approximate price difference? I wonder if it might be because there wasn't enough cost and battery savings by going with the smaller memory. Maybe chip makers are phasing out the 16MB chips because 128MB DIMMs aren't so popular anymore.

[Buck]

They were talking about Nano. iPod seems to use the same chips, it only got a brighter screen.

That lack of video support also may partly explain why the new hard-disk-drive based iPod continues to utilize the same combination of PortalPlayer and Broadcom Corp. chips

[melgross]

Originally Posted by Splinemodel

NAND is extremely battery friendly, especially when it's not being used (i.e. in sleep mode). Battery life would decrease negligibly. When a 65nm NAND chip is inactive, the power can be measured in nanowatts. Running the display backlight for a second will drain more power than the extra NAND will drain during a full charge cycle.

The other thing that caught me by surprise is the 32MB SDRAM. Caching would seem less important when using solid state non-volatile memory (NAND) rather than a hard disk, but I can't imagine that Apple hasn't already evaluated the prospect of reducing the amount of SDRAM.

While what you say is true, these chips are active during the entire time the player is being utilized. That's is one of the reasons why Apple went to more efficient chips.

We don't know the speed of the NAND circuitry being used. Some of it is quite slow.