Under-the-hood analysis reveals fundamental differences

Apple's iPod Touch looks very similar to the iPhone, but experts reported today that there are fundamental differences on the inside.

Analyst firm iSuppli's Teardown Analysis revealed that the iPod Touch sports a "distinct design and unique advancements" compared to the iPhone.

The 8GB version of the iPod Touch carries a bill of materials cost of $149.18, according to iSuppli, based on pricing in October.

This bill has decreased somewhat since October, owing to declines in pricing for memory semiconductors and other components, meaning that the cost fell to $147 during the intervening period.

The 8GB version sells for $299. Apple's iPods have traditionally been sold at retail pricing about twice the level of the hardware bill of materials and manufacturing costs, based on iSuppli's analysis of the product line.

The iPod Touch is no exception; its price is nearly double the materials and manufacturing cost at roughly 93 per cent.

According to iSuppli, the iPod Touch is an iPhone minus several features, including mobile phone capability, Bluetooth and certain software elements.

Otherwise, the core features of the iPhone user experience are all present in the iPod Touch, including orientation sensing, web surfing via Wi-Fi and a 3.5in diagonal touch-screen with multi-touch sensing.

"The iPod Touch is likely to represent the future of the high end of the iPod line," said Andrew Rassweiler, teardown services manager and principal analyst at iSuppli.

"Click-wheel interface and hard drive versions of the iPod are expected to wane in favour of touch-screen and Flash memory models like the iPod Touch.

"But despite its functional and physical outward resemblance to the iPhone, and the fact that its internals borrow heavily from the iPhone, the iPod Touch is no iPhone clone and has its own unique design."

Rassweiler estimated that the iPod Touch and iPhone designs have a 90 per cent commonality in terms of components.