Digital Home Thoughts: BusinessWeek: "Unpeeling Apple's Nano"

"It costs Apple $90.18 in materials to build the unit and $8 to assemble it, leaving a profit margin before marketing and distribution costs of about 50%. That's consistent with the margins on earlier iPod versions and serves as a reminder of what a profit machine the iPod family of products has become for Apple since it was introduced in 2001."

Apple can thank it's cushy profit margins on iPod's runaway success. If they were anywhere but on top, they would be suffering the same fate as other digital audio hardware vendors out there, namely Rio and Creative. With the former going out of business, and the latter suffering losses. Meanwhile, iPod continues to steamroll the competition, and that means fat margins.

Enjoy it while it lasts, Steve! Gravity pulls on everyone.