Apple TV Cost Breakdown
According to the report, Apple's margins on the product appear to be uncharacteristically slim from a consumer electronics product. While Apple is used to margins in excess of 50% on such products, iSuppli estimates the 40 GB Apple TV's bill of materials at $237, leaving a margin of $62 (approximately 20%). The newly released 160 GB version of the Apple TV is estimated to have a better margin at 30%.
Of all component suppliers, Intel stands to make the most off the Apple TV. The Intel under-clocked Pentium M is the most expensive component at $40. Intel also supplies a chipset valued at $28, bringing Intel's material share to 28% of the total bill of materials.
iSuppli's numbers do not account for research and development or marketing costs, and actual material costs may vary depending on special deals Apple may have acquired.
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I love apple, but large businesses can make too much money!
I never believe these figures though and they're a nonsense anyway as the R&D/marketing is never factored in.
That is still more than I would want them to make from an apple TV.
I love apple, but large businesses can make too much money!
We go through this discussion every time there is a breakdown. People need to understand that margins don't equal profit.
arn
That is still more than I would want them to make from an apple TV.
I love apple, but large businesses can make too much money!
This is stupid logic, this $62 doesn't include, shipping costs, marketing, research, support, further development, list goes on.
Any company needs to make money to progress, the more money they can make the more progression they can make. If apple didn't make as much money as they did previously then the appleTV probably wouldn't have been made.
We go through this discussion every time there is a breakdown. People need to understand that margins don't equal profit.
arn
exactly... as stated in the story:
iSuppli's numbers do not account for research and development or marketing costs, and actual material costs may vary depending on special deals Apple may have acquired.
So:
A) its just an estimate. However, its probably a decent estimate, as thats what these guys do for a living.
B) as arn said, margin does not equal profit. You still have to account for the cost to research and develop the device, as well as market it, plus any overhead expenses the company maintains.
This is stupid logic, this $62 doesn't include, shipping costs, marketing, research, support, further development, list goes on.
Any company needs to make money to progress, the more money they can make the more progression they can make. If apple didn't make as much money as they did previously then the appleTV probably wouldn't have been made.
No kidding.
20% margin in manufacturing is basically breaking even. Wanna make money? Have higher margins; it's not uncommon in other, stable segments to see 35-40% margins.
Despite all the whining about this product, nobody seems to be able to find a competing box that has all the ATV features at the same price.
Sure, apple could have added more stuff like DVR. But they would have had to raise the price. This is about the upper limit of what consumers are willing to spend on a box like this.
EDIT: milo has said it so much better :o.
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