I’ve certainly contributed more than my share to the bottom line in Cupertino, but I had no idea it was so lucrative.
Now that the Nano is on the market, attention has turned to more practical questions. Among them: How fat are Apple’s margins on it?
Market research firm iSuppli set out to satisfy the curiosity by buying the $199 2-gigabyte version of the Nano and tearing it apart. The verdict? It costs Apple $90.18 in materials to build the unit and $8 to assemble it, leaving a profit margin before marketing and distribution costs of about 50%. That’s consistent with the margins on earlier iPod versions and serves as a reminder of what a profit machine the iPod family of products has become for Apple since it was introduced in 2001. [Business Week]