An analysis of the iPod Shuffle by market researchers iSuppli shows that Apple is making huge amounts of cash on everyone sold. The people at iSuppli voided their warranty and opened the back of their iPod shuffle to work out the cost of every component.
Apparently the shuffle has found that the components, the headphones, and the packaging it ships in comes to $21.77. This means that it costs Apple about 28 per cent of the device's retail price to make. Even allowing for development or manufacturing costs, iSuppli thinks that means that Apple is making huge profits on the gizmo.
But Apple is not the only one raking in the dosh. South Korea's semiconductor giant Samsung makes the main application chip used in the device, controlling music and costs $5.98. Samsung also supplied the four gigabytes of flash memory, used primarily to store music, at a cost of about $6.
Steve Jobs famously said that Apple did not know how to make a netbook for less than $500 which was not a hunk of junk. However the Shuffle shows that Apple sticks cheap products under an expensive wrapper and charges the earth for it. Apple could easily make a netbook for $200 it just would have to charge $1000 for it.
