February 25, 2005

An Estimate on iPod Shuffle Margins [5:07 pm]

A voyage inside the iPod Shuffle

Sylvester believes it costs Apple about $59 for the materials to build the 512MB device. The most expensive component in the Shuffle is its flash memory chip, which right now costs about $31, Sylvester wrote.

Thus Apple appears to have a profit margin of about 40 percent on the 512MB player, she wrote. Sylvester estimated that Apple’s margin on the 1GB Shuffle is slightly smaller, about 35 percent. The report did not mention costs beyond the components, such as marketing, packaging, labor and other overhead. Also, while Apple sells iPods directly, it would not receive the full retail price of those sold through other stores.

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