Never mind the Apple Tax how about the Shuffle profit margin

A lot of talk is being made about a Microsoft sponsored study into the Apple Tax that Mac lovers seem to gladly pay in order to be cool. The interesting thing about the furor that ran rampant across the the tech blogosphere is that much of the talking points were about the numbers being bandied about. This made reading Steve Clayton's post today about the uproar all the more fun because he seems to have been one of the very few that caught the sarcasm and with that was slid in amongst the fancy number breakdowns.

Whether or not the idea of there being something like an Apple Tax the fact is that Apple has no qualms at all about making a very nice profit on their hardware. A good example of this is the cost of the new iPod Shuffle in contrast to the profit made on each one. To determine this ratio the good folks over at iSuppli have taken apart one of the new Shuffles to see exactly what is in them and how much all those parts might cost.

It turns out that their estimated cost of parts that go into the Shuffle works out to $21.77. Now given that the iPod Shuffle generally retails out at $79 that means the cost of parts plus the minor additional costs of industrial design and programming makes the over all cost only 28% of the retail price. Meaning in the end that Apple is making more than double the cost of the miniscule MP3 player as profit.

[hat tip to SlipperyBrick]

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