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Apple raking in profit on new iPod nano

The new iPod nano brings with it more than just added video

If you've just bought one of the new video-playing iPod nanos, you're sure to be interested to hear exactly how much it costs Apple to manufacture each one of the midget gems.

According to a part-by-part analysis (known as a 'teardown') by industry analyst iSuppli, the new nano offers Apple a vastly healthier profit margin than the previous, non-video-capable generation.

Mark-up goes up

Looking at just materials and ignoring packaging, R&D and other unquantifiables, iSuppli found that each 4GB player costs $58.85 (£29) to make and its 8GB brother just $82.85 (£41). The figures represent an 18.5 per cent fall in manufacturing costs compared to the older nano.

Considering the US retail prices of $129 (£64) and $199 (£99), Apple has surpassed even its own usual legendary 100 per cent mark-up on materials. Looking at the UK prices of £99 ($199) and £129 ($259) underlines just how profitable the Cupertino behemoth's hugely popular music players are.