iSuppli has decided to dig deep into iPod nano's structure in order to find out what are its components and their prices.

The company has discovered that for the 2GB model, the cost of the materials is somewhere around $90, $90.18 to be more exact.

Most of this sum goes to integrated circuits, like PortalPlayer's 5021C System on Chip (SoC) (audio chip), SigmaTel STMP3550 (MP3 processing chip) and Cypress Semiconductor's CY8C21434, which is used by the famous Click Wheel interface.
The flash memory, provided by Samsung, is priced at $54. according to iSuppli' estimations.

iSuppli didn't take into account the production, promoting and shipment costs, so the real price of an iPod is somewhere around $140.

Since the price for a 2GB iPod nano is about $199 and the costs amount to $140, one might say that Apple's profit per unit sold is quite significant.

It would be interesting to find out the production costs for a Sony Walkman or a Dell DJ Ditty.