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New Apple TV's Component Cost Pegged at $64

Businessweek reports on new data from research firm iSuppli estimating the component costs for the new Apple TV at under $64, representing a 35% margin on the new device before accounting for such expenses as research and development, software, patent royalties, marketing, and distribution.

According to the report, the most expensive component in the new Apple TV is the A4 system-on-a-chip that powers the device, clocking in at $16.55. Close behind is the 8 GB NAND flash memory chip from Toshiba at $14.00.

While the new Apple TV's 35% margin is significantly lower than the 50% or greater margin Apple frequently sees on its other iOS-based devices, it is much higher than than the 20% margin seen on the original Apple TV at its launch, although the difference in price points between the two devices ($99 new vs. $299 old) means that Apple's margin was greater on a dollar basis with the older model.

Following a price cut on the original Apple TV to $229, Apple saw its margins cut even further to an estimated 10% on the cheaper model.

Update: iSuppli has now posted a press release with more complete information on the study.

Top Rated Comments

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21 months ago
It is nice that it is priced as low as it is. Kudos to Apple on keeping the cost down, and hopefully will see a high adoption rate with the device. Really hoping to have iOS applications on this in the future (supported that is).
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21 months ago

It is nice that it is priced as low as it is. Kudos to Apple on keeping the cost down, and hopefully will see a high adoption rate with the device. Really hoping to have iOS applications on this in the future (supported that is).


Simple plan... make little to no money on the device. Make money on apps and content.
Rating: 0 Positives / 0 Negatives
21 months ago
I freakin' LOOOOOOOOOOOOOOOOOOOOOOOOVE my new AppleTV. Love my MBP, my iPhone, all 500 of my iPods....but :apple:TV hits that special spot for me. Call me crazy, go ahead. :p
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21 months ago
So how come it costs 2.5 times that in England? $99 is not £99, Apple.

(and to counter any arguments from people who haven't compared stores - this is a lot more than the "EU tax". iPods for example aren't £=$)
Rating: 0 Positives / 0 Negatives
21 months ago
Not bad. I'm very happy and impressed with my Apple TV and at $99 it is a complete bargin. Sure it doesn't do everything, but I'm okay with that at $99.
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21 months ago
So they could have had an even greater profit margin if they used a 2gb nand flash chip, which is perfectly fine for the current needs of the ATV concept. But still they used a 8gb chip.

It''s a great product, but still I won't buy it mostly because i dont own a TV, but if I had one it sucks that it's only 720p and rent only.
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21 months ago
App's on an TV would make me buy this. Right now, I just use my iPod to watch movies on my TV. It is simple and easy. I would much rather stream them to an TV but I need more from the device to justify it.
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21 months ago
I'm Super Happy With My Apple TV Is Just Perfect For Me!
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21 months ago
With the development cost of moving from Mac OS X to iOS and the continued investment needed to face increased competition from devices like Google's offering, Apple may well be just breaking even in order to maintain a presence in this market. It'll definitely be interesting to see where they go from here. Apple may still consider it a hobby, but I'm sure there will soon be investor pressure to actually make money off it.
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21 months ago
Wow, Apple is cutting down their profits :eek: Is Apple turning into a charity organization or what :confused: :p

Of course Apple makes the money by selling content in iTunes ;)
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