iSuppli’s Estimate of iPod Shuffle Component Prices

BusinessWeek’s Arik Hesseldahl takes yet another of iSuppli’s component price estimates of an Apple product at face value:

All told, the cost of the shuffle’s components, the headphones, and the packaging it ships in comes to $21.77, according to iSuppli’s estimates. That’s about 28% of the device’s retail price.

But then:

The device’s so-called passive components — capacitors and resistors — are unusually small. Known by their numeric label 01005, which in electronics shorthand describes their dimensions in millionths of a meter, they’re about the size of a grain of salt and cost fractions of a penny each. But they’re half the size of what had previously been considered the smallest device of their type, those labeled 0201.

So these components are half the size of anything seen before but iSuppli knows exactly how much they cost? I wrote about iSuppli here back in July 2007, wherein I pointed out that Apple releases its profit margins in legal filings every quarter, and those margins have ranged between 25-30 percent for almost a decade — nowhere near the jaw-dropping profit margin estimates from these iSuppli reports.

Update: I should clarify. My main gripe with these iSuppli estimates is how they get promoted in the press as anything close to accurate estimations of Apple’s profit margins. They may well be accurate estimations of “component prices”, but that’s not how it gets reported. And Apple’s actual profit margins, albeit not on an individual product basis, are a matter of public record.

Update 2: Those 01005 capacitors are apparently neither new nor hard to find.

★ Monday, 13 April 2009