Analysts speculate on the iPod classic's longevity

Apple's iPod classic may be no more than a stop-gap device, according to analysts at iSuppli.

The researchers have taken an iPod classic apart, and found that the system isn't as advanced as other players in Apple's stable - and a lot cheaper to make than before.

"While the rest of the iPod line has migrated to solid-state flash memory, the new iPod classic continues to employ venerable hard-disk drive (HDD) technology for storage," the researchers state.

Inside, the classic's design is essentially the same as the existing flagship iPod, with a few changes in parts and component suppliers.

The fact the iPod classic lacks advanced new features such as the wireless capability and multi-touch screen of the iPod touch, "suggest stopgap measures that are likely to limit the product's longevity and success in the market," iSuppli believes.

iSuppli claims Apple pays $78 for the 80GB drive used in the low-end classic, and approximately $140 for the 160GB drive in the high-end model.

"Apple typically makes more money on the higher-capacity versions of its products," noted Andrew Rassweiler, teardown services manager and principal analyst for iSuppli. "This is because the only difference between the low- and high-end products is the cost of the hard drive and the flash memory chips."

The iPod classic carries a Bill of Materials (BOM) of $127 for the 80GB version, and about $190 for the 160GB model, according to iSuppli's Teardown Analysis service.

The 80GB version of the classic costs 11.2 per cent less to make than that of the previous 30GB model's $143 cost.

iSuppli's estimates are strictly limited to costs for components and other materials used to construct the products. The estimates do not include costs for manufacturing, marketing, software, intellectual property, accessories and packaging or research and development.

"Apple's continuation of the iPod model without adding new features suggests a stopgap measure necessitated by lack of time to develop an HDD-based touch iPod," said Chris Crotty, senior analyst, consumer electronics, for iSuppli. "Apple may not have had time to develop an HDD-based touch-screen iPod before the 2007 holiday season."

iSuppli tentatively forecasts that iPod classic shipments will reach 3.1 million units in 2007, but only 3.5 million units in 2008, as consumers move to favor more advanced iPod models -- the analysts expect combined shipments of the new iPod nano and touch models will amount to 26 million units in 2007 and will rise to nearly 40 million units in 2008, for a 52 per cent increase.