iPod Nano/Touch estimated to be outselling iPod Classic 11:1

El Segundo (CA) – iSuppli has released its latest teardown analysis, estimating the bill of materials for the iPod Classic : While Apple was able to reduce the cost of the player substantially, the feature set and overall price have pushed the original iPod into a niche.

The market research firm believes that the recently introduced redesign of the iPod “Classic”, which reduced the weight of the player and slimmed down its form factor, will make the player more attractive in the market and increase its shipment volume. According to iSuppli, Apple will be able to sell about 3.1 million iPod Classic models this year and about 3.5 million units in 2008.

However, in terms of overall iPod sales, the hard drive based Classic is losing its significance in the iPod lineup : iSuppli estimates that the flash-based Nano and Touch models will hit 26 million units this year and “nearly” 40 million in 2008.

One of the reasons of that shift, according to the market research firm, is the fact that the Classic has a “dated” feature set and its advantage has been reduced to plain capacity, which, however, is fading as flash capacity is moving into an area that is “good enough” for many users.

But if it is storage that is important, the Classic is maintaining what iSuppli describes as a “healthy margin”. In both current models, the hard drives are by far the most expensive components of the player and account in either case for more than half of the bill of materials. The 80 GB drive is estimated to cost Apple about $78 and the 160 GB version is estimated at $140. Summing up, the 80 GB iPod is believed to carry a $127 cost for materials alone ; the 160 GB model ends up at about $190, according to iSuppli. These numbers do not include cost factors such as assembly, packaging, delivery, R&D and marketing.

Apple sells the 80 GB iPod for $249 while the 160 GB version is offered at $349.