Costliest of Apple TV's $62 in components is $17 A4 processor
The new, low-priced Apple TV has an estimated component cost of $61.98, and manufacturing reportedly adds about two more dollars to the total expenses.
iSuppli on Tuesday published the results of its Apple TV teardown, which found a total preliminary estimated production cost of $63.95. That price includes the cost of additional item boxes with the product, the research firm said.
The most expensive component was estimated to be the custom-built A4 processor, which sports 256MB of RAM. The Samsung-manufactured chip has an estimated cost of $16.55.
The Toshiba-supplied 8GB of internal memory is the second costliest component of the set top box, with an estimated cost of $14. And the Wi-Fi module, which includes a deactivated Bluetooth chip, is another $7.65.
"The first Apple TV was built like a net top computer. The architecture was basically a stripped down, small-form-factor desktop PC," said Andrew Rassweiler, director, principal analyst and teardown services manager, for iSuppli. "The second generation Apple TV is more like an iPad or iPod Touch with no display. The Apple TV?s A4 processor core, Wi-Fi/Bluetooth chip and power management chip are the same building blocks used in the, iPad, iPhone 4 and iPod Touch."
Though the device sells for a low $99 price point, iSuppli's findings suggest that Apple has about a 35 percent margin on each device it sells. The company also highlighted the remote control included in the package as the "Cadillac of remotes."
"The Apple TV's remote control represents more incredible mechanical engineering from Apple," Rassweiler said. "The remote appears to machined from a solid piece of aluminum. Because of this, the electronics of the device must be slid in through small holes on the side, similar to putting a ship in a bottle. It?s a clever and a detail-oriented piece of design that makes the remote very pricey and very unique to Apple."
The remote and other items boxed with the new Apple TV are said to cost a total of $6.10, or 9.8 percent of the build of materials cost.
iSuppli also said that it believes about 6GB of the onboard storage is available for caching streaming media. The remaining 2GB is believed to be reserved for the operating system.
iSuppli on Tuesday published the results of its Apple TV teardown, which found a total preliminary estimated production cost of $63.95. That price includes the cost of additional item boxes with the product, the research firm said.
The most expensive component was estimated to be the custom-built A4 processor, which sports 256MB of RAM. The Samsung-manufactured chip has an estimated cost of $16.55.
The Toshiba-supplied 8GB of internal memory is the second costliest component of the set top box, with an estimated cost of $14. And the Wi-Fi module, which includes a deactivated Bluetooth chip, is another $7.65.
"The first Apple TV was built like a net top computer. The architecture was basically a stripped down, small-form-factor desktop PC," said Andrew Rassweiler, director, principal analyst and teardown services manager, for iSuppli. "The second generation Apple TV is more like an iPad or iPod Touch with no display. The Apple TV?s A4 processor core, Wi-Fi/Bluetooth chip and power management chip are the same building blocks used in the, iPad, iPhone 4 and iPod Touch."
Though the device sells for a low $99 price point, iSuppli's findings suggest that Apple has about a 35 percent margin on each device it sells. The company also highlighted the remote control included in the package as the "Cadillac of remotes."
"The Apple TV's remote control represents more incredible mechanical engineering from Apple," Rassweiler said. "The remote appears to machined from a solid piece of aluminum. Because of this, the electronics of the device must be slid in through small holes on the side, similar to putting a ship in a bottle. It?s a clever and a detail-oriented piece of design that makes the remote very pricey and very unique to Apple."
The remote and other items boxed with the new Apple TV are said to cost a total of $6.10, or 9.8 percent of the build of materials cost.
iSuppli also said that it believes about 6GB of the onboard storage is available for caching streaming media. The remaining 2GB is believed to be reserved for the operating system.
Comments
the Wi-Fi module, which includes a deactivated Bluetooth chip, is another $7.65.
Deactivated? I wonder if it can be activated through firmware. Anybody know?
Deactivated? I wonder if it can be activated through firmware. Anybody know?
i'd like to think so.
Can't accuse Apple of over pricing it then. I still wonder why Apple don't adopt an optional HULU type model for TV at least. I don't mind a few ads in a TV show.
Hulu had to get licenses from the other networks, and being an NBC arm that was then sticking it to Apple by removing their content from the iTS (which may have all been part of their tactic to get full network support) it?s possible that Apple tried to get Hulu for the device and they said no.
Some things to consider from Hulu?s PoV:
For starters, when for the other iOS devices you have to use Hulu Plus at $10 per month and still with commercials to use the service. Sure, there are some benefits over the web-based service and it?s still a lot cheaper than paying for cable/sat if that works for your needs, but it?s still a charge for an ad supported service.
Secondly, when the Nexus One got Android 2.2 ?Froyo? and Flash 10.1 Beta, Hulu wasn?t happy about the ability to watch those shows on a handheld device, even though the ads were intact. Maybe this has to do with licensing, trying to prevent their affiliates from a potential lawsuit or that they won?t get paid if the ads aren?t watched in a particular way. Maybe they really don?t want the service to grow to handheld devices unless they can get a per month fee because they see it as a cash cow. I don?t know, but they surely have a reason for limiting the service so it?s possible Apple tried and failed.
All they do is guess prices then accuse Apple of overcharging... its called profit!!!
Where did they accuse Apple of overcharging? Was it in the original story? I didn't see any thing in the AI story like that. In fact, ISTM that the cost of goods for this product, as a percentage of MSRP, is higher than Apple's average.
Who is accusing Apple of overcharging?
All they do is guess prices then accuse Apple of overcharging... its called profit!!!
That?s ⅔ in component cost estimates, with engineering, assembly, packaging, testing, etc. It?s hard to see how Apple can make more money on this device than it did with the previous model when it was new unless it sells a lot more volume.
Hulu had to get licenses from the other networks, and being an NBC arm that was then sticking it to Apple by removing their content from the iTS (which may have all been part of their tactic to get full network support) it’s possible that Apple tried to get Hulu for the device and they said no.
Some things to consider from Hulu’s PoV:
For starters, when for the other iOS devices you have to use Hulu Plus at $10 per month and still with commercials to use the service. Sure, there are some benefits over the web-based service and it’s still a lot cheaper than paying for cable/sat if that works for your needs, but it’s still a charge for an ad supported service.
Secondly, when the Nexus One got Android 2.2 “Froyo” and Flash 10.1 Beta, Hulu wasn’t happy about the ability to watch those shows on a handheld device, even though the ads were intact. Maybe this has to do with licensing, trying to prevent their affiliates from a potential lawsuit or that they won’t get paid if the ads aren’t watched in a particular way. Maybe they really don’t want the service to grow to handheld devices unless they can get a per month fee because they see it as a cash cow. I don’t know, but they surely have a reason for limiting the service so it’s possible Apple tried and failed.
Thanks for the info. I asked as I just Boxee'd my original ATV since there will be no more updates for it from Apple and I must say it's pretty good. My HD TV is a bit too large for it to look all that good but hey ... it is free. It is excellent on my 15" MBP though.
I am moving soon and considering just having FiOS internet, no TV and no land line .. transferring number to buddy iPhone. So I am going to test the theory we don't need cable/ or FiOS TV!
Where did they accuse Apple of overcharging? Was it in the original story? I didn't see any thing in the AI story like that. In fact, ISTM that the cost of goods for this product, as a percentage of MSRP, is higher than Apple's average.
Who is accusing Apple of overcharging?
Lordy... keep hanging around, son.
So, the A4 costs a fraction of the intel in the previous model and is much more powerful? Win!!!
Smart move by the boys in Cupertino.
Thanks for the info. I asked as I just Boxee'd my original ATV since there will be no more updates for it from Apple and I must say it's pretty good. My HD TV is a bit too large for it to look all that good but hey ... it is free. It is excellent on my 15" MBP though.
I am moving soon and considering just having FiOS internet, no TV and no land line .. transferring number to buddy iPhone. So I am going to test the theory we don't need cable/ or FiOS TV!
Oh yeah, Boxee added Hulu support too and Hulu changed their backend to keep it from working. I?m not if they were able to beat Hulu or not, but it?s moot point with the new AppleTV as it did its job by installing Flash on the old one, which is just Mac OS X Tiger with anew UI, as you know.
Lordy... keep hanging around, son.
So, the A4 costs a fraction of the intel in the previous model and is much more powerful? Win!!!
Smart move by the boys in Cupertino.
For two years on this site I?ve been told I was crazy to think the next AppleTV hardware would be ARM-based and run iOS, then iPhone OS and before that OS X iPhone. Not by everyone but enough people that I had to rethink my position on it more than once because so many disagreed with what I thought was mostly likely.
Now, I didn?t expect it to be $99. I figured $150, but I was also thinking of a more Apple-like profit margin and the Imagination 1080p HiP H.264 decoder chip.
For two years on this site I’ve been told I was crazy to think the next AppleTV hardware would be ARM-based and run iOS, then iPhone OS and before that OS X iPhone. Not by everyone but enough people that I had to rethink my position on it more than once because so many disagreed with what I thought was mostly likely.
Now, I didn’t expect it to be $99. I figured $150, but I was also thinking of a more Apple-like profit margin and the Imagination 1080p HiP H.264 decoder chip.
Yeah, you were spot on...
Did you realize that the Intel chip alone cost more than it cost to build the entire new ATV? It's easy to see why Apple designs its own chips. Not to mention the A4 runs circles around the Intel chip.
That’s ⅔ in component cost estimates, with engineering, assembly, packaging, testing, etc. It’s hard to see how Apple can make more money on this device than it did with the previous model when it was new unless it sells a lot more volume.
That's the first thing I thought also. iSupply is typically off by about 20-30% on their estimates in that they take generic prices, and don't include labour, assembly costs etc. For the difference between iSupply's BoG and the retail to be only 30% means that the real margin is much smaller and Apple is taking a hit on this product and possibly is even selling it at what amounts to cost.
Yeah, you were spot on...
Did you realize that the Intel chip alone cost more than it cost to build the entire new ATV? It's easy to see why Apple designs its own chips. Not to mention the A4 runs circles around the Intel chip.
I know it was a unique chip that was woefully out of date but I didn?t know the estimated cost of the chip.
For running iOS the A4 I would expect the system to be more responsive, which is probably why they couldn?t upgrade the OS past Tiger. I test the UI on the new AppleTV in the store and certainly seems faster, but I think there are HW aspects of the A4 that are still slower than the Pentium M used in the old AppleTV. But that?s a non-issue, as it?s the end result that matters and this is a win for the consumer.
My only issues with the new AppleTV are the inability to buy content on the device itself. Having to buy a TV show or movie on a ?PC? running iTunes and then stream it to the AppleTV seems un-Apple to me. The lack of TV show rentals sucks, too, but that is the network?s decision, not Apple?s
That?s ⅔ in component cost estimates, with engineering, assembly, packaging, testing, etc. It?s hard to see how Apple can make more money on this device than it did with the previous model when it was new unless it sells a lot more volume.
Forget "more money", think "any money". I don't think Apple has EVER sold any product with such a small profit margin. Even if they sell a bundle, it likely won't even make a bump in earnings. It really is a hobby after all...
That, or they are really trying to preempt Google's ambitions.
That's the first thing I thought also. iSupply is typically off by about 20-30% on their estimates in that they take generic prices, and don't include labour, assembly costs etc. For the difference between iSupply's BoG and the retail to be only 30% means that the real margin is much smaller and Apple is taking a hit on this product and possibly is even selling it at what amounts to cost.
iSuppli may be figuring too much right now with the cost of most of the components. Apple uses the A4 PoP/SoC for the iPod Touch, iPad, and iPhone. I think the iPhone?s is the only one of those with 512MB RAM. Still, it?s possible that economy of scale could lower those component costs quite a bit.
From a HW engineering perspective it doesn?t seem as cramped as, well, every other device they make, but it really doesn?t need to be. This would help keep costs down by lowering micro-engineering. From a SW engineering they are using iOS 4.0 or later (as noted by the Darwin kernel build, and since this runs on that HW already there really isn?t much to alter outside the UI, which may be a pretty easy post since BackRow was built in Cocoa for the other branch of OS X. It may have needed a complete rewrite, but looking at the way it looks and the fact it was on such a slow Pentitum before it looks more like a direct port to me. (all speculation, please correct or add where necessary).
Forget "more money", think "any money". I don't think Apple has EVER sold any product with such a small profit margin. Even if they sell a bundle, it likely won't even make a bump in earnings. It really is a hobby after all...
That, or they are really trying to preempt Google's ambitions.
Two things I know in my heart:I hope that App Store and SDK gets demoed in January, thought that seems doubtful to me.
PS: Apple will put all iDevices running iOS back on the same release schedule come November. Do you think they will do the same for the new iOS-based AppleTV, or keep is separate since it?s not using CocoaTouch and therefore not an issue?
My only issues with the new AppleTV are the inability to buy content on the device itself. Having to buy a TV show or movie on a ?PC? running iTunes and then stream it to the AppleTV seems un-Apple to me. The lack of TV show rentals sucks, too, but that is the network?s decision, not Apple?s
So far it hasn't been an issue, but in my mind I'm just worried about tying up bandwidth - I have 30 mb, so it's an unnecessary concern of mine.
As far as the networks, right now there are only 9 networks excluding Netfix and what's available through AirPlay. Airplay really makes it a non-issue, though. With Hulu Plus and Netfix, I have more content than I can handle.
That's the first thing I thought also. iSupply is typically off by about 20-30% on their estimates in that they take generic prices, and don't include labour, assembly costs etc. For the difference between iSupply's BoG and the retail to be only 30% means that the real margin is much smaller and Apple is taking a hit on this product and possibly is even selling it at what amounts to cost.
Actually, iSuppli assigns a separate assembly/manufacturing cost.