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Gruber: Apple TV is Sold at Cost, HomePod at Slight Loss
On the latest episode of The Talk Show, Daring Fireball's John Gruber discusses Apple TV and HomePod pricing and whether Apple is charging too much for some of its products.
According to Gruber, Apple is actually selling the 2017 Apple TV 4K at cost, suggesting the device costs Apple $180 to make. As for the HomePod, Gruber said he believes Apple sells it at a loss.
Both the Apple TV 4K and the HomePod are priced higher than competing products from other companies like Amazon and Google, and rumors have suggested that Apple is working on lower-cost versions of both devices. For the Apple TV, Apple is said to be developing a stick-style Apple TV device, and for the HomePod, rumors suggest a smaller, cheaper model is in the works.
Gruber said that he also suspects the AirPods are priced close to cost as well, though he's not sure and can't prove it. And, of course, over time, things become less expensive to manufacture as component costs come down. Something that cost $180 in 2017 might not cost the same in 2019, as an example.
Overall, Gruber says that Apple isn't pricing its products too high, it's developing products that are too good.
"If you think it's a problem that these products are so expensive compared to their competition, that too few people buy them, it's not because Apple is charging too much, it's because Apple engineered and designed too good of a product," said Gruber.
(Thanks, Ryan Jones!)
According to Gruber, Apple is actually selling the 2017 Apple TV 4K at cost, suggesting the device costs Apple $180 to make. As for the HomePod, Gruber said he believes Apple sells it at a loss.
One thing I've heard from reliable little birdie is Apple effectively sells [the Apple TV] at cost. Like they really are like a $180 box. And you think wow this is amazing, it has an A10 processor which we know is super fast, it has crazy good graphics.Apple sells the 4K Apple TV for $180, and the HomePod for $349, though the HomePod at least is often available at a discount from third-party retailers. When the HomePod was released, estimates suggested it cost $216 to make in raw components, which does not factor into account other costs like research and development, software creation, and more.
I've heard the same thing about HomePod too. Why is HomePod so much more expensive than these other speakers you can talk to? HomePod I actually have reason to believe, Apple actually sells it at a loss. I can't prove it. I don't think it's a big loss.
Both the Apple TV 4K and the HomePod are priced higher than competing products from other companies like Amazon and Google, and rumors have suggested that Apple is working on lower-cost versions of both devices. For the Apple TV, Apple is said to be developing a stick-style Apple TV device, and for the HomePod, rumors suggest a smaller, cheaper model is in the works.
Gruber said that he also suspects the AirPods are priced close to cost as well, though he's not sure and can't prove it. And, of course, over time, things become less expensive to manufacture as component costs come down. Something that cost $180 in 2017 might not cost the same in 2019, as an example.
Overall, Gruber says that Apple isn't pricing its products too high, it's developing products that are too good.
"If you think it's a problem that these products are so expensive compared to their competition, that too few people buy them, it's not because Apple is charging too much, it's because Apple engineered and designed too good of a product," said Gruber.
(Thanks, Ryan Jones!)
Buyer's Guide: Apple TV (Don't Buy), HomePod (Neutral)
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3 weeks ago
Overall, Gruber says that Apple isn't pricing its products too high, it's developing products that are too good.
Funny as hell.
3 weeks ago
Gruber (whom I like) is a PR arm of Apple. He's on their "A" list. Whatever "rumors" he reveals have received the golden stamp of approval by Apple Markting. Sorry, but I just don't buy it that he has a "secret bird" trickling him secrets. That bird is probably Phil himself.
3 weeks ago
Well, the HomePod is really good speaker. I just wish Siri to be on par with Alexa or Google.
Having said that, I do not believe Apple sells it for a loss. May be for less profit, but not loss.
Having said that, I do not believe Apple sells it for a loss. May be for less profit, but not loss.
3 weeks ago
Overall, Gruber says that Apple isn't developing its products too good, it's pricing products too high.
Haha fixed that for you
3 weeks ago
It's all part of the game, try to keep people closer to a whole ecosystem. But I really don't believe in Apple selling at cost or loss. I believe that John Grubers's disposable income relys upon Apple for 99,95%. An unofficial spoke-person often disguised as independent. Too biased. And these two products have been on the market for more than a few weeks. All of a sudden he comes out saying Apple prices aren't too high. Yes
3 weeks ago
That might be the stupidest thing I've read all year. Gruber needs to change his knee pads.
3 weeks ago
Overall, Gruber says that Apple isn't pricing its products too high, it's developing products that are too good.
“If you think it's a problem that these products are so expensive compared to their competition, that too few people buy them, it's not because Apple is charging too much, it's because Apple engineered and designed too good of a product,"
Well that’s evidently horse hockey. Of course they make a profit on products and to imply there’s nothing that can be improved with these is incredibly disingenuous.
Man I love Apple products but Gruber’s taken a good gulp of the Koolaid. Reading this sort of sycophantic hyperbole doesn’t exactly encourage Apple’s team to price things according to the real world.
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