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.

appletvhomepod

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.

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.

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.

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!)

Related Roundups: Apple TV, HomePod

Top Rated Comments

WannaGoMac Avatar
66 months ago
I dont believe apple sells anything at cost.
Score: 217 Votes (Like | Disagree)
zin Avatar
66 months ago
Overall, Gruber says that Apple isn't pricing its products too high, it's developing products that are too good.
Funny as hell.
Score: 192 Votes (Like | Disagree)
now i see it Avatar
66 months 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.
Score: 125 Votes (Like | Disagree)
gugy Avatar
66 months ago
There is no way Apple sells anything at cost or slight loss. Try again. lol
Score: 109 Votes (Like | Disagree)
pradeepbabloo Avatar
66 months 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.
Score: 89 Votes (Like | Disagree)
twocents Avatar
66 months ago


Overall, Gruber says that Apple isn't developing its products too good, it's pricing products too high.

Haha fixed that for you
Score: 73 Votes (Like | Disagree)

Popular Stories

Beyond iPhone 13 Better Blue Face ID Single Camera Hole

Six Reasons to Wait for Next Year's iPhone 17

Thursday February 22, 2024 4:20 am PST by
Apple's iPhone development roadmap runs several years into the future and the company is continually working with suppliers on several successive iPhone models concurrently, which is why we sometimes get rumored feature leaks so far ahead of launch. The iPhone 17 series is no different, and already we have some idea of what to expect from Apple's 2025 smartphone lineup. If you plan to skip...
iPhone Notch

Apple Explored These Notch and Dynamic Island Designs for iPhones

Friday February 23, 2024 2:05 pm PST by
With the iPhone 14 Pro models in 2022, Apple introduced the Dynamic Island, which can morph and expand to display system alerts, sports scores, and a variety of other information. The feature makes the space surrounding the front camera and Face ID sensors useful compared to the notch on older iPhone models. Apple explored a variety of ideas for the iPhone's notch area over the years before...
General Apps Messages

Apple Announces 'Groundbreaking' New Security Protocol for iMessage

Wednesday February 21, 2024 6:00 am PST by
Apple today announced a new post-quantum cryptographic protocol for iMessage called PQ3. Apple says this "groundbreaking" and "state-of-the-art" protocol provides "extensive defenses against even highly sophisticated quantum attacks." Apple believes the PQ3 protocol's protections "surpass those in all other widely deployed messaging apps," according to its blog post:Today we are announcing...
Next Generation CarPlay Porsche 1

Apple Launching Next-Generation CarPlay This Year With These New Features

Wednesday February 21, 2024 2:03 pm PST by
Apple recently updated its website to confirm that the first vehicle models with next-generation CarPlay support will debut "in 2024." This wording is shown on Apple's regional websites for the U.S., Canada, Australia, New Zealand, and many other countries. The iOS 17.4 beta includes code-level references to eight new CarPlay apps:Auto Settings: This app will let you manage paired iPhones...
General Apps Messages

iOS 17.4 to Add This 'Groundbreaking' New Messaging Feature

Friday February 23, 2024 5:05 am PST by
With iOS 17.4, set to arrive in March 2024, Apple is bringing a new cryptographic security feature to iMessage called PQ3. This "groundbreaking" and "state-of-the-art" protocol provides "extensive defenses against even highly sophisticated quantum attacks," according to Apple. Let's break down what that means. Apple's iMessage service already supports end-to-end encryption, but security...
cracked glass vision pro

Handful of Apple Vision Pro Units Develop Identical Crack in Cover Glass

Friday February 23, 2024 4:46 am PST by
A small number of Apple Vision Pro owners have claimed that their headsets developed a hairline crack down the middle of the front cover glass, despite having never been dropped or mishandled. Photo of hairline crack in Vision Pro front glass (credit: Reddit user Inphenite) The first report was posted in the subreddit /r/VisionPro about 18 days ago, and several more have appeared in the last...
iOS 17

iOS 17.4 Will Add These New Features to Your iPhone

Monday February 19, 2024 6:52 am PST by
Apple last month confirmed that iOS 17.4 will be released in March, and the update includes several new features and changes for the iPhone. Key new features in iOS 17.4 include major App Store changes in the EU and Apple Podcasts transcripts. The update also adds new emoji and includes preparations for the launch of next-generation CarPlay later this year. More details about the new...
New Macs iPads iOS 17 4

What to Expect at Potential Apple Event in March: iPads, Macs, and More

Friday February 23, 2024 8:35 am PST by
Apple often holds its first media event of the year in March, so the company could be just weeks away from announcing new products. Below, we have outlined what to expect from a potential Apple Event this March. Past Apple Events in March Apple has held five events in March since 2015:Monday, March 9, 2015 Monday, March 21, 2016 Tuesday, March 27, 2018 Monday, March 25, 2019 Tuesday,...