but i am sure that fabricating (hardware/software) is much cheaper today. and if they sell iPOD they must have larger profit margins.
Which lots of people posting on this thread don't believe, because the cost of producing _the same_ hardware doesn't actually go down. If Apple tried to build an original 1984 Macintosh computer today, with the same parts, it wouldn't be any cheaper than 30 years ago. Actually, most of the parts would be impossible to find for any money, and most would be illegal due to various regulations.