iSuppli came out with another cracker this week.
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. That’s about 28% of the device’s retail price. The smaller the component cost as a percentage of price, the higher the potential profit. This suggests the per-unit profit margin on the shuffle is higher than on other iPod models. The component cost for the first iPod touch released in 2007, for instance, amounted to about $147, or about 49% of its $299 retail price. The component cost of the third-generation iPod nano, also released in 2007, amounted to about 40% of its retail price.
DavidBelfast from Twitter reckons this is okay when I suggested my displeasure at “measures” like this:
@cimota irrational hatred won’t help justify away the cost! 😛 #whyphone #trolling
It’s not irrational.
Macrumors writes:
iSuppli’s calculations consider only the actual parts of the device and do not include research and development, manufacturing, distribution, and patent royalty costs.
Because evidently, in the world of hard components, all of these things are free. It was free to develop the software, the folks working on VoiceOver and the packaging worked for free. The truck drivers who delivered the components and also who delivered the finished product to stores worldwide worked for free. The building in which these things were designed, built, stored and sold, were all built for free and are free to maintain.
Justify the cost? iSuppli are a waste of space. They add nothing to the conversation except providing headline soundbites. Surprise surprise, the basic hardware components of a device are only a fraction of the actual cost of the device.