Comment Better price estimate (Score 2, Informative) 183
I posted something like this elsewhere, but... From a recent semiconductor industry report, the latest NAND Flash spot prices (2/5/07) are:
2Gb ... $2.6
4Gb ... $3.9
8Gb ... $6.3
Assuming the same ~1.6x-ish price increment for each doubling of capacity:
16Gb ... $10
32Gb ... $16
Times 8 to get GB gives me a rough estimate of $128 for the NAND chips in the 32GB drive. Add a bit more for the other hardware and contract pricing and a cost of $160 for the storage portion of a 32GB flash iPod at current prices isn't too bad. Note that prices will fall by "later this year". I'd guess a starting list price of over $300, for which you'd get the slim design, better battery life and probably, bigger screen (maybe even some iPhone design elements).