Apple lowers costs of iPod Nano parts: iSuppli

SAN FRANCISCO (Reuters) - Apple Inc's new iPod Nano portable music and video player boasts lower component costs than the previous version, market research firm iSuppli said on Wednesday.

The bill of materials for the iPod Nano was $58.85 for the version with 4 gigabytes of flash memory and $82.85 for the model with 8 gigabytes of memory, iSuppli said.

The two models retail for $149 and $199, but the report only measured the cost of the Nano's parts and did not include other costs such as manufacturing, packaging or research and development, iSuppli said.

Total component costs for the 4-gigabyte Nano were nearly 19 percent lower than the previous version released in late 2006, iSuppli said.

The new devices, which went on sale earlier this month as part of a pre-holiday overhaul of the iPod line, also featured parts from several new suppliers, most notably U.S. memory chip maker Micron Technology Inc (MU.N: Quote, Profile, Research).

Other new suppliers included Intersil Corp and Synaptics while components from NXP Semiconductors were dropped, iSuppli said.

"Such wholesale supplier swaps are not unusual for Apple, which frequently switches its component partners. With Apple, it seems, no supplier is safe, and no slot is a given," iSuppli said.

ISuppli had said on September 19 that components from Cypress Semiconductor Corp were also dropped but on Friday, September 28, iSuppli issued a statement saying Cypress's click wheel controller chip was still in some of the new nanos.

"We indicated that Cypress Semiconductor Corp had lost its position as the supplier of the click wheel controller chip to Synaptics Inc. This was incorrect," iSuppli said.

"Based on additional samples evaluated by iSuppli, it is now clear that there are samples of the new Apple iPod nano with either Cypress or Synaptics click wheel controllers."

Apple continued to use an audio and video processor from South Korea's Samsung Electronics Co Ltd iSuppli said.

ISuppli said it expected Apple to sell 23 million Nanos this year and nearly 28 million in 2008.

(Reporting by Scott Hillis and Georgina Prodhan)