The Mac Observer

Skip navigational links

You're viewing an article in TMO's historic archive vault. Here, we've preserved the comments and how the site looked along with the article. Use this link to view the article on our current site:
Analyst: Apple's Gross Margins on New iPod nano Pushing 50%

TMO Reports - Analyst: Apple's Gross Margins on New iPod nano Pushing 50%

by , 2:20 PM EDT, September 14th, 2006 - Digg This

A teardown of the new iPod nano revealed that Apple's gross margins on the manufacturing of the new device could be as high as 50%, thanks to a steep drop in NAND flash prices, according to a report issued Thursday by Wedbush Morgan Securities analyst Craig Berger.

Mr. Berger's analysis of the nano's contents also revealed that, as expected, PortalPlayer no longer provides the system-on-a-chip inside the device, which he said was "consistent with management's 'product transition setback' announcement from last spring." In addition, three chips inside the device are simply marked "Apple" and are of unknown design origin, a marked change from the previous edition, which had no such chips. The analyst believes that one of those is the Samsung ARM processor, which replaces PortalPlayer's offering.

He noted that one of the other mystery chips is probably "the audio driver and codec, a socket formerly supplied by Wolfson Micro. Whether Wolfson is supplying the silicon for this new Nano still remains unknown, as does the functionality of the third 'Apple' marked chip located on the back of the printed circuit board near the flash memory. We look forward to further researching these matters with the proper equipment set at a later date."

Cypress, Linear Tech, National Semi, Silicon Storage Tech, and Samsung all returned to supply chips for the second-generation iPod nano.

Mr. Berger does not provide coverage of Apple's stock. He wrote the report to assess PortalPlayer -- he maintained his "Hold" rating on that stock and kept his US$10 price target, given the company's loss of the iPod nano business. As for Apple, its stock has continued on an upward trend since Tuesday's product announcements, reaching $74.36, a 0.22% boost for the day, as of 2:19 PM EST on Thursday.


If you are interested in Apple's stock, join our forum members in the Apple Finance Boards, a moderated forum for Apple Investors and people who are interested in Apple's financial dealings. For other stories regarding Apple's stock activity, visit our updated Apple Stock Watch Special Report.

Recent TMO Headlines - Updated August 17th

Tue, 4:36 PM
The iPhone 14: A Model by Model Breakdown
Tue, 3:43 PM
Apple TV+ Wants Families and Kids to Seize the Day with Trailer for 'Life By Ella'
Tue, 3:05 PM
Apple TV+ Goes to 1980's Bombay for New Original Series 'Shantaram'
Tue, 2:36 PM
Apple Adds More Control to iOS 16 Battery Indicator, but Many Seek a Better Design
Tue, 1:55 PM
UI Student Shows How iOS 16 Could Handle Notifications on the Lock Screen
Tue, 1:30 PM
Telegram Forced to Remove Animated Emoji to Get Update Approved
Tue, 1:03 PM
Apple Asking Employees To Return to Office Work Three Days a Week Starting Sept. 5
Tue, 11:52 AM
Apple Lays Off 100 Contract-Based Recruiters Due to Current Business Needs
Tue, 11:44 AM
Australian Tribunal Orders Apple to Repair a MacBook Pro with FlexGate Issue
Mon, 5:09 PM
Apple May Fire Engineer Who Contributed to Viral TikTok PSA
Mon, 4:20 PM
Apple Seeds Sixth Developer Betas of iOS 16 and iPadOS 16 Along With Fourth Public Betas
Mon, 3:51 PM
Apple TV+ Wins Big with 'Severance' and 'Ted Lasso' at Hollywood Critics Association TV Awards
  • __________
  • Buy Stuff, Support TMO!
  • Podcast: Mac Geek Gab
  • Podcast: Daily Observations
  • TMO on Twitter!