We all know how much the mark-up that Coca-Cola and Pepsi puts on their beverages. But what about iPods? How much are those marked up? In this scenario, we’ll focus on the new stick-shaped iPod Shuffle 3G.
The iPod Shuffle 3G costs Apple about $21.77 including the packaging. This makes the Shuffle Apple’s most profitable product. The $21.77 price they are charged is only about 28% of the $79 retail price. When the first iPod Touch was released, the MSRP was about $299 and the manufacturing cost was about 49% ($147).
Now that the iPhone is selling like hot cakes and Macs are selling by the hundreds of thousands, the company can sit back and focus on cost reduction. I will not be surprised if we start seeing Apple focus more on cutting costs and building advanced software over the next year rather than focusing just on introducing groundbreaking devices.