While Apple’s iPod touch closely resembles the iPhone both inside and out, the advanced mp3 player has some distinct design differences, according to a recent teardown by iSuppli. The iPod touch is an iPhone minus some features. You can't make calls, there's no Bluetooth, and certain software elements are missing. However, Wi-Fi web surfing, the 3.5-inch touch screen interface, and orientation sensing are all incorporated into the iPod touch. This makes for a 90 percent commonality in components, according to Andrew Rassweiler, teardown services manager and principal analyst for iSuppli. The key Integrated Circuit (IC) at the core of both devices is Samsung Electronics' video/applications processor, a chip based on an ARM microprocessor core and employing stacked on-package memory. And both feature a power-management IC from NXP Semiconductors. The devices differ when it comes to design. To cut space usage, the iPod touch uses advanced packaging for its components not seen in the iPhone — like 0201 diodes and passive components in 01005 enclosures on the touch’s WLAN module. "This is the first time iSuppli has seen these components in a product we’ve torn down," Rassweiler said in a statement. "Apple products always seem to push the envelope in terms of space savings, and therefore we often first see the newest, most compact components in Apple products." Memory density is another area in which the iPod touch design beats the iPhone. In its most high-end version, the touch offers 16 Gbytes of NAND flash memory, while the iPhone maxes out at 8 Gbytes of NAND flash — ostensibly because of its primary function as an mp3 player. Another notable difference is in the Printed Circuit Board (PCB) design. The iPod touch employs a single PCB as opposed to the iPhone’s modular two-PCB design. Also, a new set of components support the iPod touch’s Wireless LAN (WLAN) functions, and the touch-screen circuitry is located on the main PCB rather than on the touch-screen module. iSuppli estimates the Bill of Materials (BoM) for the iPod touch, which costs $299 for the 8 Gbyte model, to be about $150. That figure, however, doesn't include costs for software, intellectual property, accessories, packaging, or research and development. The firm says Apple’s iPods have traditionally sold for double their hardware BOM and manufacturing costs. Apple will make approximately 8.5 million first-generation iPod touches through the third quarter of 2008, when iSuppli predicts the company will offer a new product. In the meantime, the iPod touch will impact the rest of Apple's iPod line, iSuppli says. "The touch, along with the nano, may drive Apple’s HDD-based iPods close to extinction in the near future," Chris Crotty, senior analyst for consumer electronics at iSuppli, said in a statement. "While not a dollar-for-byte match for HDDs, flash now offers sufficient capacity that many consumers are willing to trade off storage for advanced displays and features."