Apple’s new iPod Shuffle has had a bit of controversy, ranging from its lack of physical buttons, restricted headphones, to the sheer (lack of) size of the device. This, certainly, isn’t going to provide any good free advertising either. According to BusinessWeek, the latest iteration of Apple’s smallest iPod only costs a mere $22 to create, but how much does it retail for? $79. That’s right, you’re being charged almost an extra $60 to own one of these tiny creations, which to some people is an amount that is unacceptable. The main application chip of the Shuffle, which runs music controlling and other functions, is worth $5.98.
To quote iSuppli analyst Andrew Rassweiler, “It’s almost like six dollars worth of flash memory tied to some flash and a battery and not much else. It’s very basic and downsized.” As the BusinessWeek article states, “All told, the cost of the shuffle’s components, the headphones, and the packaging it ships in comes to $21.77, according to iSuppli’s estimates.” This suggests that, as many people assume, if the markup on this is that high, then others will be the same. For example, for the first iPod touch, manufacturing costs were $147 whereas retail prices were $299.
Source. Neowin
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