I’ve heard of profit margin, but Apple has taken it to a new level. The production costs for the new iPod Nano, which is now sans a camera and clickwheel, are $43.73 in materials and $1.37 in total manufacturing costs. The most expensive components on the watch0like MP3 player are the 8GB of NAND Flash memory ($14.40), the display ($11.50), and the Samsung processor ($4.95). Also keep in mind each iPod Nano comes with its own headset and USB cable. But still those items are probably super-cheap as well, so we can only draw this to one conclusion: Apple is charging you for the iPod Nano because they can and want to.
And what about the $49 iPod Shuffle? It must cost like what, 20 dollars to make?