New Nano Gives Apple Record Profits
09.20.07 - 04:57pm
Apple has been known for its genius moves in the past but it would seem that somehow they improved the Nano immensely, adding video with incredible picture clarity, while at the same time lowering the cost of production.The word comes from iSuppli who did a teardown of the new 3G Nano and discovered that the component costs of the 4GB 3G Nano is 18.5 percent cheaper than the old model.
The new 4GB Nano costs $58.85 to make while the old Nano costs $72.85, both sell for the same price of $149. The 8GB Nano costs about $82.85 to make and sells for $199. Selling for approximately 67 percent more than the production costs.
“For the new nanos, Apple has exceeded even its usual lofty standards,” iSuppli said.
Overall the study found that Apple typically charges around double the manufacturing cost of its products, but that the new line retails at around three times the build cost, giving Apple their heftiest profit yet.
“The changes in components have resulted in significant cost reductions in the Nano design, allowing Apple to offer a product that is less expensive to build and that has enhanced features compared to its predecessor.” said Andrew Rassweiler, senior analyst and teardown services manager at iSuppli.
Of course we can’t really complain about the fact that Apple is making more than they did off the old Nanos. After all we get video, bigger screen, and better quality for the same price that we used to pay.
“Apple does a good job of making their old products obsolete while adding enough new features so that people feel good about upgrading to the latest version of their products,” says Kirk Kim, a portfolio manager at Transamerica. “And they do it in a way that gives you more for the same price.”
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