An iSuppi summary of parts cost does not include R&D, manufacturing, shipping, packaging, marketing, customer support, software development, warranty costs, etc. The margin could be slim to none, but the parts cost certainly doesn't tell the whole story.
iSupply's estimates do supposedly include manufacturing costs. For instance they believe the FoxxConn charge was about $8 for each 5s. You're correct about those other assorted costs tho, but aren't most of those usually benefitting several different products rather than attributed to only one?
I see, but AnandTech has stated the original revision of the 3rd gen Apple TV did have one A5 core fused off and the rev 2 model has it physically removed. They also state it has both cores for the GPU, not one. It sounds like this Apple TV's A5 starts with 2 cores and then disables one as needed as noted by the wording "removes unused core" as opposed to never having a second core at all.
In your two quotes from Anandtech, they don't state that the 3rd gen Apple TV, 3rd of the black puck version, has a dual core A5 with one of the cores fused off.
They are stating directly that it is a unique A5 with a single core CPU and a 543MP2.
The only version with the dual core CPU, but with one core fused off is the 2nd gen Apple TV, the 2nd gen black puck version.
It's not like I didn't read the exact same passages last year.
In your two quotes from Anandtech, they don't state that the 3rd gen Apple TV, 3rd of the black puck version, has a dual core A5 with one of the cores fused off.
They are stating directly that it is a unique A5 with a single core CPU and a 543MP2.
The only version with the dual core CPU, but with one core fused off is the 2nd gen Apple TV, the 2nd gen black puck version.
It's not like I didn't read the exact same passages last year.
1) That isn't how it reads to me, especially considering the 2nd gen Apple TV didn't have an A5 so any commentary about a fused or removed core on the A5 would only be referring to the 3rd gen Apple TVs.
2) Your last sentence sounds snippy. I, too, read those articles in March 2012 and March 2013, hence my reply to you with what I thought was well documented argument of my position.
iSupply's estimates do supposedly include manufacturing costs. For instance they believe the FoxxConn charge was about $8 for each 5s. You're correct about those other assorted costs tho, but aren't most of those usually benefitting several different products rather than attributed to only one?
For Apple, it's all one big jumble of stuff as they have their own retail outlet. As best as I can tell, the cost of selling and supporting a device is about the same as the BOM, for iPhones at least.
If you are selling through retail, like Best Buy or Target, the retailer gets a cut. Replacement units have to be maintained, support staff have to be trained, sales staff have to be maintained, inventory has to be maintained.
If you see a BOM, it won't be that far off to double that cost for a good estimate on how much it really costs to build and sell the product.
I'm sure Apple also makes $0 on TV and Movie rentals/purchases as a direct result of the Apple TV. Even if Apple lost a little on the device (or broke even), they make up for it in content revenue.
I also wonder if provider apps such as HBO, ESPN, MLB, MLS, etc pay apple some type of royalty to have their channel on the device or is that a freebie by Apple? Another revenue generator if yes.
I agree with @razorpit, sounds like Wood is a little nervous if he has to speculate about the profit of a competitor with zero facts on-hand.
I highly doubt that Apple is selling anything that they are losing money on. Breaking even as a tool to get more folks invested in the iTunes ecosystem, perhaps. But not flat out selling at a loss. They can afford to but I just don't see it happening.
Or if they are losing money it's not more than a few cents a unit.
1) That isn't how it reads to me, especially considering the 2nd gen Apple TV didn't have an A5 so any commentary about a fused or removed core on the A5 would only be referring to the 3rd gen Apple.
Maybe we are just talking past each other.
I'm only talking about the black puck version. There are three versions of that model:
The first version has an A4. This version is branded at Apple TV version 2 or Take 2.
The 2nd version of the of the black puck model, has a dual core with the one core fused off. This is refered to as the third version of "Apple TV" if you include the Intel models with a HDD.
The 3rd version of the black puck model, has a single core only A5. This version is refered to as "Apple TV" version 3a if you include the Intel models with the HDD.
I'm only talking about the black puck version. There are three versions of that model:
The first version has an A4. This version is branded at Apple TV version 2 or Take 2.
The 2nd version of the of the black puck model, has a dual core with the one core fused off. This is refered to as the third version of "Apple TV" if you include the Intel models with a HDD.
The 3rd version of the black puck model, has a single core only A5. This version is refered to as "Apple TV" version 3a if you include the Intel models with the HDD.
Clear enough?
Yes, that is what I'm referring. The 3rd gen Rev. A is the one with the fused off A5 core. That means it was not originally single core A5, but one that had one core fused off. The 3rd gen Apple TV Rev. B has Anand stating the core was removed. He did not state that the Rev. B model was designed with a single-core A5, but that it was removed thereby implying it had a second core that was removed. I'm under the impression these techniques are utilities to reduce costs as there will inevitably be dual-core chips that don't pass muster but will have one of two cores that are functional and therefore good enough for the A5 used in the Apple TV.
The 3rd gen Apple TV Rev. B has Anand stating the core was removed. He did not state that the Rev. B model was designed with a single-core A5, but that it was removed thereby implying it had a second core that was removed. I'm under the impression these techniques are utilities to reduce costs as there will inevitably be dual-core chips that don't pass muster but will have one of two cores that are functional and therefore good enough for the A5 used in the Apple TV.
The 2012 Apple TV model has dual-core A5 with one of the cores fused off. I don't believe they harvested bad A5 chips that only had one working CPU core. They were all fully qualified dual-core chips with one core fused off. Going the harvesting the bad die route seems entirely too unreliable and they would have to resort to fusing off cores anyway if they didn't have enough bad dies.
The 2013 Apple TV model is a unique single core A5. It's not a dual-core with one core fused off. This is inevitably about reducing the cost per chip.
Anandtech says it directly:
Quote:
Chipworks removed and de-lidded the new chip, determining that it’s truly a new piece of silicon with a single core ARM Cortex A9 and a dual-core GPU.
Look at the die sizes:
Quote:
The GPU seems to be untouched. There are other changes however, resulting in a 37.8mm^2 die down from 69mm^2 in the previous A5 design. … Thanks to Chipworks’ analysis we know that both of these chips are still made on Samsung’s 32nm process, ... but rather to reduce cost
The 2013 Apple TV has an SoC, likely the most expensive component in the Apple TV, that is 45% smaller. It almost doubles the number of chips per wafer and therefore likely drove the cost of the Apple TV SoC down by about half.
He's a liar. Pure and simple. IHS iSupply has a total BOM of $63.95. Apple does not build things for free. Unlike others in the industry they don't have to.
The only thing that has changed in the black puck models is the A processor so pretty much everything else has stayed the same.
Also here is a quote from the iSupply article
Quote:
Improved margins
Compared to the first-generation Apple TV, the new model offers a dramatically improved ratio of hardware cost to retail price. The initial version of the Apple TV appeared to be a near give-away or subsidized product for Apple, sold at prices that weren’t much more than the underlying hardware costs. With the second generation version of the hardware, the Apple TV’s price is about 35 percent above its BOM and manufacturing cost.
So in reality the Price above BOM on the Apple TV 2 and most likely the 3 is about 35% and there BOM includes manufacturing.
I was only referring to these 3 statements, which I think are really dumb and doesn't require my explanation:
"Apple TV is essentially an accessory for the iPad"
"They lose money, which is unusual for Apple,"
"If you're losing money, why would you want to sell more?"
Oh I misinterpreted slightly. Those are dumb comments though, and as before I wish CEOs would talk about their own products. Otherwise it's insulting to the people who actually create them.
Oh I misinterpreted slightly. Those are dumb comments though, and as before I wish CEOs would talk about their own products. Otherwise it's insulting to the people who actually create them.
QFT. I fully agree. Also, it comes across as a personal viewpoint. And a CEO ought to be a spokesman for the whole company, and somehow I don't think the employees share this viewpoint.
I'm only talking about the black puck version. There are three versions of that model:
The first version has an A4. This version is branded at Apple TV version 2 or Take 2.
The 2nd version of the of the black puck model, has a dual core with the one core fused off. This is refered to as the third version of "Apple TV" if you include the Intel models with a HDD.
The 3rd version of the black puck model, has a single core only A5. This version is refered to as "Apple TV" version 3a if you include the Intel models with the HDD.
Clear enough?
"Take 2" was actually the second version of the AppleTV software for the original AppleTV. Which is why the first smaller black puck was AppleTV Gen2 because it was the second generation of hardware. So the AppleTV life cycle so far is as follows:
AppleTV Gen1 (Mac Mini like running a modified version of OSX 10.4 & FrontRow)
AppleTV Gen1 w/ Take 2 software update (Removed the requirement of syncing to a computer)
AppleTV Gen2 & iOS based software (first version if the black puck, used A4 SoC)
AppleTV Gen3 revA (used dual core A5 with one core fused off)
AppleTV Gen3 revB (uses new smaller single core A5)
So you are spot on with your argument but just a little off on the naming of things. This might be where some of the confusion was? The third version of the black puck (Gen3 revB) uses a new single core A5 that "physically removes the unused core", meaning it's an A5 designed as a single core part. It never had a second core that was disabled/fused off which is what I think Sol doesn't fully grasp.
Here is a link to the part of the "Take 2" keynote
Comments
In your two quotes from Anandtech, they don't state that the 3rd gen Apple TV, 3rd of the black puck version, has a dual core A5 with one of the cores fused off.
They are stating directly that it is a unique A5 with a single core CPU and a 543MP2.
The only version with the dual core CPU, but with one core fused off is the 2nd gen Apple TV, the 2nd gen black puck version.
It's not like I didn't read the exact same passages last year.
1) That isn't how it reads to me, especially considering the 2nd gen Apple TV didn't have an A5 so any commentary about a fused or removed core on the A5 would only be referring to the 3rd gen Apple TVs.
2) Your last sentence sounds snippy. I, too, read those articles in March 2012 and March 2013, hence my reply to you with what I thought was well documented argument of my position.
For Apple, it's all one big jumble of stuff as they have their own retail outlet. As best as I can tell, the cost of selling and supporting a device is about the same as the BOM, for iPhones at least.
If you are selling through retail, like Best Buy or Target, the retailer gets a cut. Replacement units have to be maintained, support staff have to be trained, sales staff have to be maintained, inventory has to be maintained.
If you see a BOM, it won't be that far off to double that cost for a good estimate on how much it really costs to build and sell the product.
It's not zero or free.
I also wonder if provider apps such as HBO, ESPN, MLB, MLS, etc pay apple some type of royalty to have their channel on the device or is that a freebie by Apple? Another revenue generator if yes.
I agree with @razorpit, sounds like Wood is a little nervous if he has to speculate about the profit of a competitor with zero facts on-hand.
Or if they are losing money it's not more than a few cents a unit.
Maybe we are just talking past each other.
I'm only talking about the black puck version. There are three versions of that model:
The first version has an A4. This version is branded at Apple TV version 2 or Take 2.
The 2nd version of the of the black puck model, has a dual core with the one core fused off. This is refered to as the third version of "Apple TV" if you include the Intel models with a HDD.
The 3rd version of the black puck model, has a single core only A5. This version is refered to as "Apple TV" version 3a if you include the Intel models with the HDD.
Clear enough?
Yes, that is what I'm referring. The 3rd gen Rev. A is the one with the fused off A5 core. That means it was not originally single core A5, but one that had one core fused off. The 3rd gen Apple TV Rev. B has Anand stating the core was removed. He did not state that the Rev. B model was designed with a single-core A5, but that it was removed thereby implying it had a second core that was removed. I'm under the impression these techniques are utilities to reduce costs as there will inevitably be dual-core chips that don't pass muster but will have one of two cores that are functional and therefore good enough for the A5 used in the Apple TV.
iSupply's estimates do supposedly include manufacturing costs.
You are right. I checked the iSuppi site. Please adjust the total cost by $1.97 per unit. But they bring up a good point that I forgot to include.
Software licensing and Royalties.
The 3rd gen Apple TV Rev. B has Anand stating the core was removed. He did not state that the Rev. B model was designed with a single-core A5, but that it was removed thereby implying it had a second core that was removed. I'm under the impression these techniques are utilities to reduce costs as there will inevitably be dual-core chips that don't pass muster but will have one of two cores that are functional and therefore good enough for the A5 used in the Apple TV.
The 2012 Apple TV model has dual-core A5 with one of the cores fused off. I don't believe they harvested bad A5 chips that only had one working CPU core. They were all fully qualified dual-core chips with one core fused off. Going the harvesting the bad die route seems entirely too unreliable and they would have to resort to fusing off cores anyway if they didn't have enough bad dies.
The 2013 Apple TV model is a unique single core A5. It's not a dual-core with one core fused off. This is inevitably about reducing the cost per chip.
Anandtech says it directly:
Look at the die sizes:
The 2013 Apple TV has an SoC, likely the most expensive component in the Apple TV, that is 45% smaller. It almost doubles the number of chips per wafer and therefore likely drove the cost of the Apple TV SoC down by about half.
Not really news.
You sell the razors cheap and charge more for the blades
Apple Just Buy Roku already!
The whole chipset is unlikely to cost more than $10. I really cant see total cost heading past $20.
He's a liar. Pure and simple. IHS iSupply has a total BOM of $63.95. Apple does not build things for free. Unlike others in the industry they don't have to.
Heres a link to the BOM list https://technology.ihs.com/388826/isuppli-teardown-reveals-apple-tvs-inner-ipad
The only thing that has changed in the black puck models is the A processor so pretty much everything else has stayed the same.
Also here is a quote from the iSupply article
Compared to the first-generation Apple TV, the new model offers a dramatically improved ratio of hardware cost to retail price. The initial version of the Apple TV appeared to be a near give-away or subsidized product for Apple, sold at prices that weren’t much more than the underlying hardware costs. With the second generation version of the hardware, the Apple TV’s price is about 35 percent above its BOM and manufacturing cost.
So in reality the Price above BOM on the Apple TV 2 and most likely the 3 is about 35% and there BOM includes manufacturing.
Wow, another CEO with shit for brains.
Depending on the full context I might agree with you. Their engineers did make a neat device though.
I was only referring to these 3 statements, which I think are really dumb and doesn't require my explanation:
I was only referring to these 3 statements, which I think are really dumb and doesn't require my explanation:
Oh I misinterpreted slightly. Those are dumb comments though, and as before I wish CEOs would talk about their own products. Otherwise it's insulting to the people who actually create them.
QFT. I fully agree. Also, it comes across as a personal viewpoint. And a CEO ought to be a spokesman for the whole company, and somehow I don't think the employees share this viewpoint.
"Take 2" was actually the second version of the AppleTV software for the original AppleTV. Which is why the first smaller black puck was AppleTV Gen2 because it was the second generation of hardware. So the AppleTV life cycle so far is as follows:
AppleTV Gen1 (Mac Mini like running a modified version of OSX 10.4 & FrontRow)
AppleTV Gen1 w/ Take 2 software update (Removed the requirement of syncing to a computer)
AppleTV Gen2 & iOS based software (first version if the black puck, used A4 SoC)
AppleTV Gen3 revA (used dual core A5 with one core fused off)
AppleTV Gen3 revB (uses new smaller single core A5)
So you are spot on with your argument but just a little off on the naming of things. This might be where some of the confusion was? The third version of the black puck (Gen3 revB) uses a new single core A5 that "physically removes the unused core", meaning it's an A5 designed as a single core part. It never had a second core that was disabled/fused off which is what I think Sol doesn't fully grasp.
Here is a link to the part of the "Take 2" keynote
-PopinFRESH