Apple Selling Apple TV Near Cost?
Computerworld's Seth Weintraub first speculated that Apple is subsidizing the cost of Apple TV with their new movie rental sales. Indeed, Apple dropped the price for the Apple TV ($299-$399 -> $229-$329) at Macworld 2008 -- but this discount was only reflected in the U.S. and Canadian markets. To be fair, Apple's international pricing has always been higher than the U.S. counterparts, but this discrepant price drop did raise some eyebrows.
To followup, Gizmodo asked iSuppli for the current materials costs for building the Apple TV. According to their numbers, the $229 40GB Apple TV costs $208.20 to build while the $329 160GB Apple TV costs $235.70 to build. This includes raw component costs alone without taking into account assembly, packaging, shipping, and development costs.
These 10-30% margins are significantly lower margins than Apple typically enjoys on their hardware products, suggesting that they are indeed aggressively pricing the units to drive more sales. The Apple TV was originally launched at Macworld 2007 but was reportedly met with modest sales. Apple revamped the Apple TV at this year's Macworld with the inclusion of direct-to-tv movie rentals. This revamped software will be available as a free software update to all Apple TV owners this week.
To followup, Gizmodo asked iSuppli for the current materials costs for building the Apple TV. According to their numbers, the $229 40GB Apple TV costs $208.20 to build while the $329 160GB Apple TV costs $235.70 to build. This includes raw component costs alone without taking into account assembly, packaging, shipping, and development costs.
These 10-30% margins are significantly lower margins than Apple typically enjoys on their hardware products, suggesting that they are indeed aggressively pricing the units to drive more sales. The Apple TV was originally launched at Macworld 2007 but was reportedly met with modest sales. Apple revamped the Apple TV at this year's Macworld with the inclusion of direct-to-tv movie rentals. This revamped software will be available as a free software update to all Apple TV owners this week.
Top Rated Comments
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53 months ago
The Computerworld article doesn't go into detail but these boxes would make a great platform on which to hack. With margins so low and the Apple TV being such a good piece of hardware, there are lots of interesting opportunities!
53 months ago
I think $ 229.00 is just about a right price. I will definitely buy one in the near future.
53 months ago
I think this is the right price for this device and I think we can all understand why Apple can justify selling this device with such low profits. Respect to Apple for putting technological progression above profits for once (although in the long run, with the movie rentals etc it probably helps the companies overall profit).
53 months ago
I think $ 229.00 is just about a right price. I will definitely buy one in the near future.
Me too, as soon as I get my HDTV.
53 months ago
It's approaching 1 year old. Surely it's cheaper to make it now, considering there are no hardware changes????
53 months ago
All the news about Apple TV is great, but when is the damn update? I've actually gone and rented some movies only to find out i can't stream them to my Apple TV.
But i'm still really excited about the idea that i can now get my TV shows and Movies via the internet even when i'm no longer in the US.:)
But i'm still really excited about the idea that i can now get my TV shows and Movies via the internet even when i'm no longer in the US.:)
53 months ago
I would buy an Apple TV, but considering my HDTV only has two HDMI ports, I don't think I will.
One of the ports is occupied by my DirecTV box, the other by my PS3.
Also, 720p definitely isn't 1080p, especially on a 57" TV. I wish Apple would have offered the best available.
One of the ports is occupied by my DirecTV box, the other by my PS3.
Also, 720p definitely isn't 1080p, especially on a 57" TV. I wish Apple would have offered the best available.
53 months ago
All the news about Apple TV is great, but when is the damn update? I've actually gone and rented some movies only to find out i can't stream them to my Apple TV.
But i'm still really excited about the idea that i can now get my TV shows and Movies via the internet even when i'm no longer in the US.:)
According to this site, February 1st.
http://appletvsource.com/content/view/538/1/
53 months ago
Interesting...seems like a market Apple knows it has to be in even though it doesn't have a revolutionary vision (or is limited by the media companies to the extent it can't have a revolutionary vision).
I'm not terribly interested in this product, but I think if HD rentals are to remain competitive with Blu-Ray, which has far higher quality and bit-rate (I think the maximum on the Apple TV is only 5 mbps), Apple needs to up its offerings.
Apple TV has always seemed like Apple putting some electronics in a box and somewhat embarrassingly putting it on the shelf and saying, "Does someone want one of these?"
"No you don't?"
"What if we add pay per view movies, do you want it now?"
It's the complete opposite of the iPod which had a clear simple vision and the message, "You want one of these."
I'm not terribly interested in this product, but I think if HD rentals are to remain competitive with Blu-Ray, which has far higher quality and bit-rate (I think the maximum on the Apple TV is only 5 mbps), Apple needs to up its offerings.
Apple TV has always seemed like Apple putting some electronics in a box and somewhat embarrassingly putting it on the shelf and saying, "Does someone want one of these?"
"No you don't?"
"What if we add pay per view movies, do you want it now?"
It's the complete opposite of the iPod which had a clear simple vision and the message, "You want one of these."
53 months ago
I would buy an Apple TV, but considering my HDTV only has two HDMI ports, I don't think I will.
One of the ports is occupied by my DirecTV box, the other by my PS3.
Also, 720p definitely isn't 1080p, especially on a 57" TV. I wish Apple would have offered the best available.
If your TV has component inputs as well, the AppleTV will work for you. I've used it with component and HDMI and I can't discern a difference at 720p or 1080i. Just send your sound to the TV or home theater system through optical sound output or RCA jacks from the AppleTV.
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