iPod shuffle's cool is more than skin deep

In a previous article about the iPod shuffle, we reported IDC's analysis of the iPod shuffle, which stated that the manufacturing cost of the 512 MB unit is likely around $60.

iSuppli has done a new analysis which states the bill of materials cost is $43.21 and total manufacturing cost is only $45, significantly lower than its competitor the Rio Forge Sport. The analysis goes on to say:

iSuppli's teardown of the iPod Shuffle revealed the product achieves its compact size partly through a highly-dense design that places components extremely close together. The density of the iPod Shuffle design is high compared to the Rio Forge Sport, or even in comparison with the other dozens of other handheld devices. The iPod Shuffle also makes use of ultra-thin chip-scale packaged semiconductors, the first time iSuppli's Teardown Analysis service has actually seen these advanced devices inside a piece of electronic equipment.

For the iPod Shuffle, cool is more than skin deep. The elegance of the product extends to its marketing, pricing-and its design. For Rio and others competing in the fast-growing MP3 market, Apple is showing the way to cool.

However, Apple's own statements contradict iSuppli's cost analysis, and claim the margin on the iPod shuffle is around 20% or less.