Apple Cuts Cost of iPod Nano Parts

Apple's new iPod Nano portable music and video player boasts lower component costs than the previous version, market research firm iSuppli said on Wednesday.

The bill of materials for the iPod Nano was $58.85 for the version with 4 gigabytes of flash memory and $82.85 for the model with 8 gigabytes of memory, iSuppli said.

The two models retail for $149 and $199, but the report only measured the cost of the Nano's parts and did not include other costs such as manufacturing, packaging or research and development, iSuppli said.

Total component costs for the 4-gigabyte Nano were nearly 19 percent lower than the previous version released in late 2006, iSuppli said.

The new devices, which went on sale earlier this month as part of a pre-holiday overhaul of the iPod line, also featured parts from several new suppliers, most notably U.S. memory chip maker Micron Technology Inc.

Other new suppliers included Intersil Corp and Synaptics Inc, while components from NXP Semiconductors and Cypress Semiconductor Corp were dropped, iSuppli said.

"Such wholesale supplier swaps are not unusual for Apple, which frequently switches its component partners. With Apple, it seems, no supplier is safe, and no slot is a given," iSuppli said.

Apple continued to use an audio and video processor from South Korea's Samsung Electronics Co Ltd, iSuppli said.

iSuppli said it expected Apple to sell 23 million Nanos this year and nearly 28 million in 2008.