What exactly is the product... well its a 20 gig hard drive, well lets see, those go for about what, $10-30 now retail. It has a databus for the hard drive, which means a controler chip, it also has usb, which again is a control chip. Well just about ever motherboard manufacturer already has chips that are combo usb contollers and ide controller, and cost less then $2. You also have a processor chip to handle I/O requests and perform the MP3, etc. decoding ($5-10). You have a few capacitors and resistors (maybe, maybe $1-3 worth). You have your pcb for all the chips with traces for all the connections ($5). A header for the usb connector ($.10), a volume dial ($.05), a 1/16" headphone jack ($.50), a battery pack ($.40), a lcd screen? (not sure but only $5 if it has one), an external power adaptor ($1-4), and the plastic outside shell ($5). So, on the high side of the components you are only looking at ~$60-70 in parts, then figure another $10 in production costs, so figure $80 to produce.... hmmm... that sure looks VERY close to what we just bought it for....