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iSuppli: Supplier shuffle marks new iPod nano

Posted: 24 Sep 2007 ?? ?Print Version ?Bookmark and Share

Keywords:iPod nano? chip design? portable media player?

iSuppli Corp. reveals that Apple's latest iPod nano is a completely new design, reusing almost no components and sporting a bevy of fresh suppliers compared to the previous model.

Component suppliers making their nano product line debut in the latest version include Micron Technology Inc., Dialog Semiconductor GmbH and Intersil Corp., while Synaptics Inc. returns to the platform after an absence.

"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 for iSuppli.

iSuppli's teardown analysis team has dissected the low-priced version of the new nano and has determined the product carries a BOM cost of $58.85 for the 4Gbyte version and $82.85 for the 8Gbyte version. The 4Gbyte and 8Gbyte versions retail at $149 and $199, respectivelyboosting margins for Apple, which has typically sold its products previously at about twice the level of their hardware BOM costs, noted iSuppli.

Micron wins big
The arrival of Micron, Dialog and Intersiland the return of Synaptics has been accompanied by the departure of previous part providers, NXP Semiconductors and Cypress Semiconductor Corp. in the latest version of the product. iSuppli noted that such supplier swaps are not unusual for Apple, which frequently switches its component partners.

According to iSuppli, Micron was the most notable addition to the nano. In the nano torn down by iSuppli, Micron was the maker of the high-density NAND flash memory that serves as media storage, worth $24 in the 4Gbyte version of the product and $48 in the 8Gbyte version. This gave Micron the largest single portion of value in the nano of any supplier at 40.8 percent for the 4Gbyte version and 57.9 percent for the 8Gbyte, said iSuppli.

Apple's primary suppliers of NAND flash historically have been Samsung Electronics Co. Ltd., Toshiba Corp. and Hynix Semiconductor Inc. Micron is last in share position as a supplier to Apple for NAND flash, and only began shipping small quantities during the last year. While this is a major win for Micron, Samsung remains the world's largest maker of NAND-type flash and is likely to continue to be used as a supplier by Apple, iSuppli believes.

Samsung: Kicking apps, taking names
One of the biggest and most important slots on the nano is the combined core video processor/microprocessor chip in the system, supplied by Samsung. Costing $8.60, the Samsung core IC processor accounts for 14.6 percent of the 4Gbyte version's BOM, and 10.4 percent of the 8Gbyte's BOM, said iSuppli.

This is the second time around for Samsung's core processing IC in the nano line, said iSuppli. In the nano version released in late 2006, Samsung supplied the core processing IC as well. Samsung also contributed 32Mbytes of Mobile SDRAM, worth $2.72, or 4.6 percent of the 4Gbyte BOM and 3.3 percent of the 8Gbyte BOM.

*Direct materials only: Manufacturing, accessories, IP, software, R&D are not included.

iSuppli forecasts that total iPod nano shipments will hit 23 million units this year and 27.9 million during 2008.

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