Nano Revamped: Apple Switches Component Suppliers

Apple's latest iPod nano has been completely revamped, with almost no reused components and a host of new suppliers, according to an iSuppli teardown. Micron Technology Inc., Dialog Semiconductor GmbH, and Intersil Corp. make their nano debut, while Synaptics Inc. returns to the platform after an absence. Previous part providers like NXP Semiconductors and Cypress Semiconductor didn't score any design wins this time. This is the first time iSuppli identified a Micron part in an iPod. The company manufactured the high-density NAND flash memory that serves as media storage. Apple's primary suppliers of NAND flash had been Korea's Samsung Electronics Co., Toshiba Corp., and Hynix. Since Samsung remains the world's largest NAND flash memory maker, Apple is likely to keep the company as a major supplier, according to iSuppli. The company won one of the most important slots on the nano — the combined core video processor/microprocessor chip in the system. It's the second time Samsung's core processing chip has been used in the nano line. Supplier swaps are not unusual for Apple, which frequently switches its component partners, according to iSuppli. "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," Andrew Rassweiler, senior analyst and teardown services manager for iSuppli, said in a statement. The Bill-of-Materials (BOM) for the new nano is estimated to be $58.85 for the 4Gbyte version and $82.85 for the 8-Gig, though that's not the full cost of manufacturing. Software, IP, packaging, and R&D costs must also be factored into the final price: $149 for the 4-Gig version, and $199 for the 8-Gig. According to iSuppli, Apple's products traditionally sell for twice their hardware BOM costs — a high rate compared to most electronic products. iSuppli predicts iPod nano shipments will reach about 23 million units in 2007 and 28 million in 2008.