In my earlier post, I wondered about the financial impact of switching from hard drives to flash to Apple's overall finances. Turns out that flash is more expensive than hard drives. I didn't realize this. Here is a quote from a CNET article:
"Right now, 1GB of flash memory in the volume market costs about $45, according to both Semico and iSuppli. Thus, the 2GB iPod Nano, which sells for $199, contains around $90 worth of flash, while the $249 4GB version has about $180 worth of flash, said Semico's Jim Handy."
So, some very simple math, tells us that is $160 worth of memory. Now, we're talking about Apple here, so they probably got a great deal from their supplier. Still, this is expensive. However, there is an element to the consumer electronics space that is similar to the fashion industry. The nano is new, hot, and sexy, and based on the reports of crowded stores, it was a smart move on their part.
I suspect whatever negative financial impact the switch from hard drive to flash may have, will be offset by an uptick in sales due to the new model (and the longer battery life enabled by flash) and perhaps lower customer support related costs.