iSuppli, which does research on the PMP market, have looked deep into what makes an iPod Shuffle 3G and found out that all told, the parts and packaging are only worth $21.77 (Rs 1,100 approx). The new iPod Shuffle is the most profitable Apple device yet…
Source: PMPToday

That’s about 28% of the device’s retail price. The smaller the component cost as a percentage of price, the higher the potential profit. This suggests the per-unit profit margin on the shuffle is higher than on other iPod models. The component cost for the first iPod touch released in 2007, for instance, amounted to about $147, or about 49% of its $299 retail price. The component cost of the third-generation iPod nano, also released in 2007, amounted to about 40% of its retail price.

That leaves a lot of room for Chinese cloners, right? It didn’t take them long at all to clone the Nano 3G (Phatty) and the back to slim Nano 4G.Only that I’m not sure they are capable of manufacturing an MP3 player similar to the iPod Shuffle 3G. Component parts may be cheap but the research it takes to produce something so small may not readily translate for the OEM manufacturers, especially that $1.20 lithium battery that could be the smallest ever in mass production. All they have until now are these Shuffle cases.

Related Topics