[Knitebane]

I'm thinking manufacturing. It's easier to manufacture a MP3 player. It's cheaper to ship MP3 players. And it's cheaper to package them.

You also need to think of the cost of materials. A 512MB flash chip runs around $30-35 in bulk.

[durasell]

That price will come down pretty quick.

For the record, I've seen all kinds of "off brand" and odd looking MP3 players around Chinatown. So, that's what I'm partially basing my prediction on...

[antiRepublicrat]

You also need to think of the cost of materials. A 512MB flash chip runs around $30-35 in bulk.

And that's the normal price. Referring to my #29, I wonder how much Apple pays.

[Senator Bedfellow]

That's the spot price, and actually it's lower than that now - you can get 512 MB NAND chips for under $30 now. Buy them on contract and you can get them for much, much less, though - around half that price if your timing is good.