Feeds

Apple TV made for the mass market, bits breakdown reveals

Choosing a cloud hosting partner with confidence

Apple's Apple TV costs $299 in the US - and not much less to make, according to a price list of the parts that has been produced by market watcher iSuppli. The cost of materials and manufacturing: $237.

That yields Apple no more than $62 in profit - rather less on Apple TVs sold through third-party retailers. That's a gross margin of 20.7 per cent - rather less than the 40-50 per cent that iSuppli estimates Apple makes on its iPod product line.

The Apple-styled "DVD player for the 21st Century" box's most pricey component is its 1GHz Intel Pentium M processor, which iSuppli estimates costs the Mac maker $40 a pop. Next up is the unit's 40GB hard drive, manufactured by Fujitsu, which costs $37.

But it's early days for the Apple TV, and Apple is clearly getting in at the start of demand for downloaded-content set-top boxes. As demand grows, production volumes rise and Apple can cut better volume-purchase deals. The Apple TV's hardware requirements are unlikely to change radically going forward - beyond storage capacity, of course - allowing the company to take advantage of the falling price of behind-the-curve chip products.

apple appletv
Apple TV: small box, big opportunity?

Right now, the Apple TV is effectively a Mac minus a few computing-centric components, but there's room for Apple to cut costs in future generations by building a more dedicated device to replace the generic PC-based first generation, much as Microsoft did with the Xbox.

MS, of course, needed a more powerful second-generation games console, something Apple probably doesn't with Apple TV until a TV standard emerges beyond 1080p HD.

In any case, Apple TV isn't a Mac but a consumer electronics device, and that means a different pricing plan no matter what. iPhone may be priced high in the hope of selling to price-no-object early adopters, but the Apple TV is geared toward are more mass-market audience, and that means keeping the price down.

Security for virtualized datacentres

Whitepapers

A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.