Second generation iPod Nano cuts Apple manufacturing costs

Aside from increased battery life, slimmer form factor and a bigger screen the new Apple iPod Nano offers a relevant but much less obvious benefit; It's cheaper to make.

Research company iSuppli disassembled one of Apple's new toys and performed a cost analysis on the inner workings of the popular new portable player. What they found suggests that the 4GB model of second generation Nano costs $17 less than it's predecessor.

The materials cost for the new model are approximately $72 and the new device retails for $199. iSuppli added that the only additional costs associated with the new model lie in the much loved and anticipated aluminum case, which costs roughly $2 more than the plastic skins of the original Nano.

Given the rate at which Apple is able to move the Nano out the door, reduced costs associated with producing the popular model portend great things for Apple's bottom line. The large margin also leaves Apple an exceptional amount of room to compete on price against other similar products as companies like SanDisk prepare to make a run at Apple's overwhelmingly successful iPod.

[via News Factor]

Grant Robertson is a regular contributor to The Digital Music Weblog and follows the portable music and video gadget market with an obsessive compulsion