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New Apple TV may cost less than $64 to build

updated 01:25 pm EDT, Tue October 5, 2010

Could prove more profitable

The overhauled Apple TV costs less than $64 to make, even though it sells for $99, says iSuppli. The research firm notes that the most expensive part in the set-top is actually Apple's custom A4 processor, valued at $16.55. By radically reducing the cost of components in the new model, it should theoretically be more profitable than the older one. iSuppli comments that the use of the A4 may provide special savings, since the chip is already installed in the iPad, iPhone 4 and fourth-generation iPod touch.

The second-most expensive part is said to be 8GB of flash storage, supplied by Toshiba. A combination Wi-Fi and Bluetooth module, produced by Broadcom, is valued at $7.65. By contrast, a Texas Instruments microcontroller costs just 93 cents. The Apple TV's $64 total price does not, however, account for other expenses, such as research or marketing.






by MacNN Staff

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Comments

  1. bdmarsh

    Joined: Dec 1969

    +5

    This is a surprise?

    with shipping, and in many cases distribution channel & reseller profits eating into the final price, it really couldn't cost much more than that, and still be sold at $99

  1. testudo

    Joined: Dec 1969

    +3

    just to point out

    None of the editorial content of this article came from iSuppli, but rather the business week article and MacNN. Again, iSuppli just releases pricing information for those who care about such things (repair houses, for example) and doesn't give a rats a** about how much Apple is making on any product.

  1. dankothehun

    Joined: Dec 1969

    +6

    A case for paper newspapers

    I don't understand the point of this. The bottle of water that you're drinking probably cost 2 cents yet you paid $1.19. So friggin what.

    There's a lot more to what you pay than parts, most importantly the VALUE the product or service provides.

    These articles of partial facts are completely pointless. No wonder I keep reading paper newspaers, where because of limited space, editors must cull out the worthless cr@p!

  1. tutorcat

    Joined: Dec 1969

    +2

    May be the opposite business model of iPod ?

    Selling the product at low margin but make more profit from selling contents on iTunes ?

    Actually, I don't really know ;-)

  1. msuper69

    Joined: Dec 1969

    +1

    @dankoathehum

    To add to your comments, I ask everyone how much it would cost if an individual wanted to make an Apple TV from scratch. Millions of dollars I would guess.

    $99 is a bargain.

  1. Jeronimo2000

    Joined: Dec 1969

    0

    Macnn is right

    Apple is clearly insane to charge $99 for that thing if it only costs $64 to make. I would not pay a penny more than $64 for it.

    Oh, wait, I forgot to switch my brain back on. I always turn it off before hitting that Macnn bookmark, it helps me to enjoy the quality of the writing. Now, where was I?

  1. Bobfozz

    Joined: Dec 1969

    0

    Should we comment on how much...

    MacNN receives from advertising and other outlets (news????) I think we are too often had by their relentlessly idiotic articles. We get half way through and discover, AHA, "worthless."

    Apple has to make money. It's quite possible they have someone who makes headlines that are completely disjoint from the article. The last sentence in this "article" is really quite important as they say, "doesn't include marketing or research."

    Why not just headline: PARTS COST TO MAKE iTV.
    But then the haters would seize on the fact that Apple makes anything. Dumb story.

  1. vintagegeek

    Joined: Dec 1969

    -4

    That Much?

    I'm surprised it costs that much given there is nothing inside except a flash chip.

  1. Scott_R

    Joined: Dec 1969

    0

    They shouldn't profit?

    OK, how much SHOULD it cost? All you accounted for are parts. What about R&D costs? Advertising? Packaging? Shipping? Labor (both foreign and domestic)? Costs to cover damage and defects? Retailer's profit? And so on.

    Pretty meaningless article.

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