“A look under the hood of Apple Computer’s iPod Shuffle shows the company is making music with two chips,” John G. Spooner reports for CNET News. “IDC analyst IdaRose Sylvester recently dissected a 512MB iPod Shuffle, purchased at retail, in order to determine what the tiny music player is made of. Her report, published earlier this month, reveals that Apple used two main chips spread over two separate circuit boards to foster the compact design of the music player, which was introduced in January. But despite the Shuffle’s tiny size, Apple still left room for a relatively high profit margin.”

“The Shuffle that Sylvester dismantled was based around two main chips–an MP3 decoder from SigmaTel and a flash memory chip from Samsung–which means the device uses many fewer chips than hard-drive-based iPods, she wrote,” Spooner reports. “The MP3 decoder, mounted to one board, takes charge of a multitude of functions. Its handles music, including the playing of MP3, AAC and Audible format files. At the same time, it harbors a USB 2.0 converter, SDRAM for buffering data and a headphone driver. The chip can also handle Windows Media music file decoding, voice recording, sending images to an LCD screen and an FM tuner, she wrote. Those features go unused in the Shuffle, though.”

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