According to iSuppli Corporation, Apple Incorporated’s iPods traditionally have been sold at retail pricing that is about twice the level of their hardware Bill of Materials and manufacturing costs. The iPod touch is no exception. The 8GB version of the iPod touch carries a BoM cost of $149.18, based on pricing in October. When adding the iPod touch’s direct-conversion cost of $5.86—consisting of manufacturing, assembly and test expenses, the total cost is $155.04. The 8GB version of the iPod touch sells for $299, meaning the price is nearly double its materials and manufacturing cost, at 92.9% higher. As usual, these estimates are strictly limited to expenses for components and other materials and manufacturing, and do not include costs for software, intellectual property, accessories and packaging, or research and development costs.
“The iPod touch likely represents the future of the high end of the iPod line. Click Wheel-interface and Hard-Disk Drive (HDD)-based versions of the iPod are expected to wane in favor of touch-screen and flash-memory-equipped models like the iPod touch. But despite its functional and physical outward resemblance to the iPhone, and the fact that its internals borrow heavily from the iPhone, the iPod touch is no iPhone clone, and has its own unique design,” said Andrew Rassweiler, teardown services manager and principal analyst for iSuppli.