iPod touch teardown reveals hefty margins

Apple’s iPod Touch is often labeled as an iPhone minus its mobile phone capability, Bluetooth and certain software elements. Although this initial impression is largely correct, the two differ in the efficiency of their internal components and design to better serve the intended uses for either device.

Today iSuppli released its teardown analysis of the iPod touch, and the results revealed that despite sharing close to 90 percent of the same components the touch uses some of the most advanced packaging techniques and compact components ever seen in an Apple product. For instance, the touch employs a single printed circuit board as opposed to the iPhone’s modular two-PCB design. Other differences include a different spot for the location of the touch-screen circuitry, as well as different circuitry for the WLAN functionality.

The research firm also confirmed that Apple is seeing some enviable margins on the device. According to iSuppli, the 8GB version of the iPod Touch carries a bill of materials cost of $149.18, and with expenses for manufacturing, assembly and testing, the total costs runs about $155.04. With a retail price of $299 for the 8GB iPod touch, Apple is enjoying a hefty profit margin of almost 50%.