iSuppli teardown reveals Apple's surprising choices for iPod nano
Sep 23, 2005
A recent dissection of the new iPod nano music player conducted by iSuppli Corp.'s Teardown Analysis service reveals that Apple Computer Inc. has made some surprising choices regarding its semiconductor suppliers. These choices include the use of PortalPlayer Inc.'s 5021C System on Chip (SoC) for audio processing and Cypress Semiconductor Corp.'s CY8C21434 for the circuitry behind the iPod nano's trademark Click Wheel interface. These and other integrated circuits account for 77 percent of the $90.18 total Bill-of-Materials (BOM) cost for the 2Gbyte version of the nano, according to iSuppli. Apple Opens the Door for PortalPlayer The PortalPlayer selection comes as a surprise given SigmaTel Inc.'s previous dominance of the flash-memory-based MP3 player segment. For example, Apple uses the SigmaTel STMP3550 chip for MP3 audio processing in its flash-based iPod shuffle. PortalPlayer previously supplied audio processors only for hard-disk-drive-based MP3 players. The PortalPlayer 5021C is not a standard part and likely is an Apple-specific derivative of the company's 5020 chip. Apple's use of the 5021C instead of PortalPlayer's newer 5024 chip is also a windfall for Wolfson Microelectronics plc, whose WM8975G codec is used in the nano as well. Many new audio processors like the 5024 incorporate the functionality previously provided by separate chips like Wolfson's WM8975G. Cypress Takes Root in nano
The use of the Cypress chip confirms the months-old rumor that Apple was abandoning Synaptics Inc. in favor of its own proprietary solution based on the Cypress part. Previous iPods utilized Synaptics' technology for the circuitry behind the Click Wheel, which is a key element of the unique iPod design. However, the nano utilizes Cypress' CapSense technology, which relies on the company's CY8C21x34 family of Programmable System-on-Chip (PSoC) devices to convert signals relating finger position into digital-control functions. A PSoC is a programmable chip that integrates a microcontroller with several analog and digital components that can be configured for specific applications. Samsung Gives Apple a NAND
At the heart of the nano is NAND flash memory supplied by Samsung Electronics Co. Ltd. iSuppli's teardown revealed that the 2Gbyte nano employs two separate NAND flash parts, each with a 1Gbit by 8 configuration. Due to a substantial discount from Samsung, the two parts together are priced at only $54, iSuppli estimates. "By switching from hard drives to flash memory for a key iPod model, Apple has radically altered the dynamics of both the memory market and the MP3 player market," said Chris Crotty, senior analyst for consumer electronics at iSuppli. Apple's competitors may find that procuring sufficient flash memory will be a challenge.
Samsung is by far the largest supplier of NAND flash, and iSuppli estimates that Apple will buy as much as 40 percent of Samsung's output in the second half of 2005, leaving less for other customers. Even if other MP3 makers can procure sufficient memory, they will lack the volume needed to negotiate the same discount Apple likely is receiving from Samsung. Worse yet, competition for the remaining flash supply may result in price premiums that squeeze Average Selling prices (ASPs) and margins. The result will be even more competitive pressure in the MP3 market, which already saw one key player, Rio, announce its exit weeks before Apple's nano launch. The iSuppli Teardown Analysis service's report on Apple's iPod nano costs $499 and includes a complete BOM, cost data, photos and descriptions of key components. A similar analysis also is available for the iPod shuffle. About iSuppli's Teardown Analysis service
The Teardown Analysis service from iSuppli provides complete, detailed analyses of electronic devices such as mobile handsets, digital cameras, PDAs, MP3 players and PCs by performing complete teardowns of devices. iSuppli delivers a complete assessment of all electronic, electromechanical, and mechanical components, examining both pricing and design issues. More information is available at www.isuppli.com
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