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June 29, 2007

business

iPod: the world traveler

Posted Jun. 29, ’07, 11:30 AM PT by Kate Marshall
Category | Business

iPodnanos.jpgWhat is the true value of an iPod, in global terms? I know it’s a Friday (and what a Friday!) but come now—we must exercise our brains a little, lest they atrophy before 6 p.m. local time. A good way to start is by examining reports of the iPod’s global economic value.

Researchers at the University of California recently conducted a a study examining the 451 parts that make up an iPod and where they’re manufactured. Using a $299 30-GB iPod video as their reference model, the researchers determined that:

The most expensive component in it was the hard drive, which was manufactured by Toshiba and costs about $73. The next most costly components were the display module (about $20), the video/multimedia processor chip ($8) and the controller chip ($5). They estimated that the final assembly, done in China, cost only about $4 a unit.

However, since many of the companies involved in an iPod’s assembly are either owned by companies in other countries, or outsource their own labor, it becomes difficult to truly track an iPod’s money trail. Final estimates by the researchers suggest that of a $299 iPod’s retail cost, $163 went towards American companies and workers: $75 for distribution and retail, $80 to Apple, and $8 to assorted component makers. Unaccounted-for parts and labor was about $110, but the study authors plan to track those costs down as well.

[Via Ars Technica]


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