Electronics Manufacturing – M528

iNside the iPod and iPod Nano


(2006, Computerworld: Apple's new iPods are better than ever)


The iPod and iPod Nano have almost become staple goods among the youth, and adult, cultures of the world. It is a portable digital music player that can support several file types; MP3, AAC/M4A, Protected AAC, AIFF, WAV, Audible audiobook, and Apple Lossless audio file formats. Released by Apple, the first model of the iPod was announced in October 2001, with the first generation of the iPod coming to market by Christmas of the same year (Wikipedia, n.d., iPod) . Since the first generation of the original iPod, Apple have released several other models of the iPod, they are currently at the 5th Generation iPod, with the iPod Nano and iPod shuffle also released world wide.

A little history

When developing the first generation model of the iPod, Apple had to make the decision on how to store the data on the device, with the two options being a Hard Disk Drive, or a Flash memory module. The advantages of a hard drive are that it offers superior capacity to a flash memory module, but the size and cost are not comparable to that of flash, the opposite is true for the flash memory module. Toshiba America Information Systems had been researching into making a hard disk drive smaller, and had pioneered a hard disk technology, offering a 1.8 inch hard disk (actual dimensions with protective casing just shy of 2 x 3 inches) weighing in at 2oz, and capable of storing up to 5Gb of data. They offered this technology to Apple, and it was used in the first generation iPod. The technology for the microprocessors that Apple use in their iPod models, started out with 2 ARM cores that were designed and produced by PortalPlayer. To help design the user interface (and implement it) Apple CEO Steve Jobs supervised while they contracted design company Pixo. When Pixo had came up with a suitable idea, Apple tweaked the interface until it suited their needs. (Wikipedia, n.d., iPod)

(Technology Review, 2005, Inside the iPod Nano)
What goes inside?

There are five main categories of components and chips that go inside the iPods and iPod Nanos, these are the Microcontroller (the hub of the goings on inside the device), the Audio chip (Codecs and decoding algorithm's for the digital music), the Storage Medium (where your precious music is kept), the Batteries (the things that make it go!) and the LCD display (the bit that lets you see what you're doing).


Wolfson Codec

Audio Chip

Storage Medium


LCD Screen


As you can see, Apple actually produce a minuscule amount of what actually goes inside their iPod range, they get the components from a large range of suppliers, even using different suppliers for the same part, in a different model. After striking a deal with Sasmsung, they have managed to secure a massive advantage in their market, meaning that they can purchase their memory modules for the 2GB model of the Nano from Samsung , for $54 rather than the rate Samsung charge to their other customers of $90 (iSuppli, 2006, Apple Delivers More For Less With New iPod Nano). This allows Apple to increase their profit margins even more, and as iSuppli.com discovered, the iPod Nano costs roughly $90.18 in materials, and $8 to assemble, this model retails for around $150-$170 meaning that the profit margin on the 2GB model (before marketing and distribution costs) is in the general area of 50%, a staggering amount by all stretches of imagination (iSuppli, 2006, Apple Delivers More For Less With New iPod Nano). Also, an iSuppli.com teardown services manager found that “Due to design changes and component price declines, iSuppli estimates that Apple has reduced the Bill-Of-Materials (BOM) cost for the new $199 retail-priced 4Gbyte nano to $72.24, less than the $89.97 that was estimated for a first-generation 2Gbyte nano upon release,” (Andrew Rassweiler, teardown services manager and senior analyst for iSuppli, 2006, Apple Delivers More For Less With New iPod Nano). I believe that this is how Apple have managed to maintain market leadership, as it has allowed them to reinvest money into innovations and given them the ability to drive the price down, making the iPod appear more attractive to the consumers they are targeting.