An interesting look at what might just be Apple’s most profitable product, the third-generation iPod Shuffle, reveals some interesting data. Research firm iSuppli observes that even with packaging and headphone costs included, a present iPod Shuffle only runs about $21.77 to produce – a mere 28% of the retail price, as compared to 49% of the first generation iPod Touch’s $299 retail tag being consumed by production costs.
Even more fascinating is that the semiconductor giant Samsung dominates the Shuffle’s component make-up, accounting for 57.6% of the device’s bill of materials. The third-gen iPod Shuffle is composed of 171 distinct parts, down from the 213-component second-gen Shuffle, and is unsurprisingly smaller as well. The device includes 4GB of NAND flash memory, which runs for about $6 as compared to the second-gen’s 1GB at $6.98 only two years ago.
While the iPod Shuffle’s launch comes at a period in time where MP3/PMP market is congested with competition and the economy is in upheaval, iSuppli predicts a mere 5.4% decline in device shipments during 2009, but expects things to rebound as soon as next year with a mild 2% growth.