Apple iPod Shuffle 2nd Generation 1GB Teardown

Overview / Main Features

The Apple Shuffle has always been the smallest member of the iPod family and always distinguished itself not just by it's small size but also by it's lack of display and the fact that it was the first flash-based player from Apple. This latest incarnation of the Shuffle has been around for a while - and was simultaneously released at the same time as the second generation of the Nano (Q3, 2006).

Apple iPod Shuffle 2nd Generation 1GB Main Image

Users interested in the 'music-only' feature, but especially users interested in the 'super-portability' and basic rugged indestructibility of the Shuffle. It is most typically used by those using it in an athletic / outdoors or gym environment and is particularly well-suited for this.

There are many competing products in this space ranging from name to no-name products, but, as with other Apple products, there is always a loyal cult following, however Apple's ultimate goal is always to excel with a user interface that draws the average, non-tech savvy person to their product.

Released

Launched September 2006.

Apple iPod Shuffle 2nd Generation 1GB - Enclosure Disassembly

At the time of writing (Q4 2007) - there is only one Shuffle available from Apple (1GB) and it is priced at $79USD in the US.

Volume Estimations

Based on our tracking and forecasts of the shipments of the various Apple iPod products - we have assumed a total 'lifetime production volume' for this incarnation (only) of the iPod Shuffle at 40 million units.

The Shuffle will likely have a longer production lifetime that the "sweet-spot Nano, though thuis is hard to predict with the unpredictable Apple. Unlike the second generation Nano which survived only 1 year - this Shuffle, seems destined to continue production into 2008, and we have assumed that it will be produced from Q3 2006 through Q3 2008 for the purposes of this analysis.

As a reminder, teardown volume production assumptions are primarily used for our cost analysis in terms of amortized NRE and tooling costs, especially for custom components specific to the model being analyzed (mechanical components especially). Unless assumed volumes are different by an order of magnitude, minor changes in volume (say 1 million vs. 2) rarely have a large net effect on our final analysis because of this.

Function / Performance

No testing was performed on the iPod Shuffle.

Apple iPod Shuffle 2nd Generation 1GB Cost Analysis

Main Cost Drivers Representing ~66% of total materials cost

Toshiba Semiconductor - TC58NVG3D4CTG00 - Flash - NAND, 8Gb, MLC, 70nm, Non-Volatile (Qty:1)

Samsung Semiconductor - - Application Processor - DSP, ARM Core (Qty:1)

USB Docking Station - w/ Plug Cap and Clear Plastic Packaging Sleeve (Qty:1)

Battery - Li-Ion Polymer, 3.7V, 105mAh (Estimated) (Qty:1)

Nan Ya PCB - Main PCB - 6-Layer - FR4/RCF HDI, 2+2+2, Lead-Free (Qty:1)

Total Costs w/Conversion Costs ~$22

What Is Not Included in our Cost Analysis

The total materials and manufacturing costs reported in this analysis reflect ONLY the direct materials cost (from component vendors and assorted EMS providers), AND manufacturing with basic test costs. Not included in this analysis are costs above and beyond the material manufacture of the core device itself - cost of intellectual property, royalties and licensing fees (those not already included into the per component price), software, software loading and test, shipping, logistics marketing and other channel costs including not only EMS provider and the OEM's margin, but that of other resellers. Our cost analysis is meant to focus on those costs incurred in the manufacture of the core device and exceptionally in some circumstances the packaging and literature as well.

Manufacturing Notes

Country of Origin / Volume Assumptions

Apple has historically produced it's iPod product lies with a number of EMS providers / partners:

• iPod Shuffle: Asustek
• iPod Nano: Hon Hai, Inventec Appliances
• iPod Video: Quanta (and possibly Inventec Appliances)

These manufacturers produce the bulk of the iPods in and from souces that are mostly in China.

Furthermore, we have assumed that custom mechanicals (plastics, metals, etc. were sourced in China, as well. Sub-assemblies may also come from other countries of origin, but for the purposes of this analysis, when there is no proof to the contrary, we have stayed with this assumption (China being the country of origin) for all levels of assembly.

Country of origin assumptions relate directly to the associated cost of manufacturing, where calculated by iSuppli. In the cases of 'finished' sub-assemblies (such as Bluetooth modules), we do not calculate internal manufacturing costs, but rather assess the market price of the finished product in which case country of origin assumptions may or may not have a direct effect on pricing.

Remember also that labor rates are applied directly only to hand inserted components and systems in our bill of materials, and although regional assumptions do, these new rates do not have a direct effect on our modeled calculations of placement costs for automated SMD assembly lines. ""Auto" inserted components (such as SMT components) placement costs are calculated by an iSuppli algorithm which allocates a cost per component based on the size and pincount of the device. This calculation is affected by country or region of origin as well.

Design for Manufacturing / Device Complexity

The Apple iPod Shuffle features a total component count of 196 components (not including box contents), of which 29 components are mechanical in nature. In comparison to the original Apple iPod Shuffle, which contained 153 total components, of which 19 components were mechanical, the new Shuffle…..

The Apple iPod Shuffle is the smallest self-contained functional finished product we have ever torn down and also is one of the least complex / integrated.

Component counts have a direct bearing on the overall manufacturing cycle times and costs, and also can increase or decrease overall yields and re-work. Our calculations of manufacturing costs factor counts and more qualitative complexities in the design.

Note that manual labor has a much smaller effect on auto-insertion assembly lines (for the Main PCB, for example), where manufacturing costs are much more capital equipment intensive and driven by these investment costs.

Design Notes

The Apple iPod Shuffle is a very simple and well-integrated design that really features only three major important functional puzzle pieces (the memory, the central processing chip, and battery) which also drive the bulk of the cost. Overall there are very few 'important' secondary components.

Memory*

• Flash - Toshiba Semiconductor - TC58NVG3D4CTG00 - NAND, 8Gb, MLC, 70nm, Non-Volatile

* - Most memory items are multi-sourced - sources indicated here are typically one of several sources.

MPU

• Samsung Semiconductor - Application Processor - DSP, ARM Core (S5L8441C01)

Battery

• Battery - Li-Ion Polymer, 3.7V, 105mAh (Estimated)

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Apple iPod Shuffle 2nd Generation 1GB - Box Contents