The iPod touch uses advanced components and technological implementations that mean it's less a stripped-down iPhone and more an indication of the future of the iPod product line, at least, that's what one group of analysts believe.
iSuppli has revealed some of the details pertaining to its latest tear-down analysis of the iPod touch. In order to figure its thoughts, the firm takes an existing product apart and links this to its own existing information as to the cost and manufacture of specific components identified in a device.
The company's report begins: "On the outside, Apple’s iPod touch looks a lot like its iPhone. On the inside, there’s a strong resemblance - but a dissection conducted by iSuppli’s Teardown Analysis service reveals the touch sports a distinct design and unique advancements compared to the iPhone."
In contrast to its $299 US retail price, the analysts note that the cost (excluding r&d and marketing, plus some other associated expenses) of the 8GB iPod touch comes to $149.18 (based on October's pricing). These costs have declined since October as a result of certain component cost decreases, including in memory, semiconductors and other parts, the analysts note.
"Apple’s iPods traditionally have been sold at retail pricing that is about twice the level of their hardware build and manufacturing costs, based on iSuppli’s extensive teardown analysis of devices in the product line. The iPod touch is no exception, with its price nearly double its materials and manufacturing cost, at 92.9 per cent higher," the analysts state.
iSuppli's estimates don't include costs for software, intellectual property, accessories and packaging. Nor do they include research and development costs, because such data cannot be derived from a teardown and component analysis.
"Functionally, the Apple iPod touch is an iPhone minus several features, including cell-phone capability, Bluetooth and certain software elements. Otherwise, the core features of the iPhone user experience are all present in the iPod touch, including orientation sensing, web surfing via WiFi and the product’s signature feature: a 3.5-inch diagonal touch screen with multi-touch sensing. These advanced features place the iPod touch right at the top of Apple’s iPod line," iSupplie says.
"The iPod touch likely represents the future of the high end of the iPod line," explained Andrew Rassweiler, teardown services manager and principal analyst for iSuppli. "Click Wheel-interface and Hard-Disk Drive (HDD)-based versions of the iPod are expected to wane in favour of touch-screen and flash-memory-equipped models like the iPod touch. But despite its functional and physical outward resemblance to the iPhone, and the fact that its internals borrow heavily from the iPhone, the iPod touch is no iPhone clone, and has its own unique design.”
Rassweiler estimated the iPod touch and iPhone designs have a 90 percent commonality in terms of components - as an example, iSuppli cites the key Integrated Circuit (IC) within both the iPod touch and iPhone. This component is from Samsung and is based on an ARM microprocessor core. This $13.19 component accounts for 8.5 per cent of the iPod touch’s total cost.
The iPod touch’s design differs from the iPhone because it has been uniquely developed to fit the device's form and funtion. It uses advanced packaging for some of its components, packaging that isn't used in the iPhone. This includes 0201 diodes and passive components in 01005 enclosures on the touch’s WLAN module.
Pushing the envelope
"This is the first time iSuppli has seen these components in a product we’ve torn down," Rassweiler said. "Apple products always seem to push the envelope in terms of space savings, and therefore we often first see the newest, most compact components in Apple products."
iSuppli also claims the iPod touch employs a single printed circuit board as opposed to the iPhone’s modular two-PCB design. Other differences between the touch and the iPhone include a new set of components to support the iPod touch’s Wireless LAN (WLAN) functions and the location of the touch-screen circuitry on the main PCB - rather than on the touch - screen module.
Based on the history of the various Apple iPod products, iSuppli has assumed a total lifetime of one year for the first-generation iPod touch. iSuppli estimates that if Apple follows its historic product pattern, it will manufacture about 8.5 million first-generation iPod touches during the approximate one-year period from the third quarter of 2007 through to 2008.
iSuppli expects the first-generation touch will be replaced by a new product in the third quarter of 2008.
"The touch, along with the nano, may drive Apple’s HDD-based iPods close to extinction in the near future," said Chris Crotty, senior analyst, consumer electronics, for iSuppli.