Apple rumored to sell Apple TV 4K, HomePod at cost

Posted:
in General Discussion edited February 2
Shedding light on Apple's hardware pricing strategy, and offering a glimpse into the company's push into services, blogger John Gruber claims the tech giant sells the current generation Apple TV 4K at cost and the HomePod at a loss.

Apple TV 4K


Citing his usual "birdies," Gruber in an episode of his podcast "The Talk Show" discusses Apple's premium hardware pricing and says the company "effectively" sells Apple TV 4K at cost. The claim suggests Apple packs $180 worth of components, labor and other expenses in the streaming set-top box.

"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 and it has crazy good graphics,'" he says.

The information has not been verified, though Apple's set-top streamer does include higher grade components than competing setups. Beyond the custom A10X Fusion chip, Apple TV 4K boasts advanced wireless technology, 32GB or 64GB of storage, a Siri Remote with touchpad and microphone and more.

Gruber goes on to say that he has heard similar claims about the $350 HomePod, but believes Apple potentially sells the speaker at a loss. He also speculated that AirPods are sold at cost.

"Why is HomePod so much more expensive than these other speakers you can talk to? Well, HomePod, I actually have reason to believe, Apple actually sells it at a loss," Gruber says.

HomePod's bill of materials is largely unknown, as Apple incorporates custom-built audio equipment like horn-loaded tweeters and a custom amplification system into its smart speaker. Further, HomePod includes high-end features like dynamic audio processing, beamforming, automatic bass calibration and other exotic niceties.

Gruber's claims suggest Apple is positioning its ancillary hardware product lines as access points to lucrative services like Apple Music and an as-yet-unannounced video streaming service rumored to debut this year.

Apple's Services arm, which includes Apple Music, iTunes, iCloud, the App Store and licensing, has experienced a meteoric rise on the back of a gargantuan user install base.

For the most recent quarter ending in December, services revenue hit an all-time high of $10.9 billion with a gross margin of 62.8 percent. During an investor conference call this week, CFO Luca Maestri said the segment is on track to double 2016 revenue levels by 2020.
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Comments

  • Reply 1 of 98
    The technology in HomePod is indeed not appreciated by many. It’s in a class of its own at any price.
    davenpatsutmaymagman1979mobirdcornchipronnMacProracerhomie3caladanian
  • Reply 2 of 98
    The HomePod is a great speaker but Apple has hobbled it so badly. Open the think up to allow anything my iOS or OSX device plays to go through the speaker, then you will sell millions of them. Let us use them with our televisions.
    curtis hannahmobirdcornchipScot1caladanianharry wildanantksundarambala1234hodarwatto_cobra
  • Reply 3 of 98
    maxitmaxit Posts: 212member
    I agree. HomePod, AirPods and Apple TV are maybe the only products in current Apple lineup to be rightly priced.
    I can’t understand why HomePod isn’t distributed worldwide... I would be glad to buy one in Italy.
    curtis hannahcornchipronncaladanianbohlerwatto_cobra
  • Reply 4 of 98
    k2kwk2kw Posts: 1,710member
    Best Buy and other retail stores had the HomePod for $250 during Christmas.   I imagine they must cost Apple less than that to make.  Since they didn’t brag on it during the earnings call it’s probably their biggest flop since they 5C.   But we Will probably have an editorial from DED that it’s the greatest smart speaker.
    jbdragonavon b7ksecGeorgeBMackitatithodar
  • Reply 5 of 98
    MisterKit said:
    The technology in HomePod is indeed not appreciated by many. It’s in a class of its own at any price.
    Making and accepting phone calls on the HomePod is a special experience. The audio is so clear, vibrant and rich, you would thinkn the person you are talking with is in the same room next to you. A superb speaker. The audio quality as a speaker is worth $349. Add the iOt capabilities, Siri, HomeKit integration and that is where the value of the device comes into play. 
    mobirdcornchipronnrandominternetpersonleeeh2repressthisStrangeDaysstanthemanhodarwatto_cobra
  • Reply 6 of 98
    macxpressmacxpress Posts: 4,820member
    k2kw said:
    Best Buy and other retail stores had the HomePod for $250 during Christmas.   I imagine they must cost Apple less than that to make.  Since they didn’t brag on it during the earnings call it’s probably their biggest flop since they 5C.   But we Will probably have an editorial from DED that it’s the greatest smart speaker.
    I see we're still talking out of our ass....
    magman1979mobirdLordeHawkronnmac_dogshark5150spliff monkeyandrewj5790repressthisStrangeDays
  • Reply 7 of 98
    This is interesting if true, the HomePod is still a flop costing 3 times as much as some of its competitors, with Siri lacking well behind on it. AirPods seem to be popular, but I still think Apple is looking into lower cost versions, but they are likely years away. The Apple TV is great hardware, but since smart TVs are everywhere, the device needs to be marketed as a ps4pro/xbox one s competitors at half the prices, which they need AAA games ported to iOS to match, with ideally USB C external drive support to download the massive files (and the lack of a port on the gen 5 tv doesn't help).
    mike54patchythepirate
  • Reply 8 of 98
    magman1979magman1979 Posts: 1,121member
    This is interesting if true, the HomePod is still a flop costing 3 times as much as some of its competitors, with Siri lacking well behind on it. AirPods seem to be popular, but I still think Apple is looking into lower cost versions, but they are likely years away. The Apple TV is great hardware, but since smart TVs are everywhere, the device needs to be marketed as a ps4pro/xbox one s competitors at half the prices, which they need AAA games ported to iOS to match, with ideally USB C external drive support to download the massive files (and the lack of a port on the gen 5 tv doesn't help).
    Same old recycled troll garbage... Trolls can't even come up with any good material anymore to at least make themselves entertaining!
    ronnmacplusplusmac_dogMacProMisterKitchiaspliff monkeyrepressthisStrangeDaysroundaboutnow
  • Reply 9 of 98
    Bull. Apple kills the product before they lose their margins. If this happens, Tim has lost it.
    cornchipanantksundaramasdasdrepressthishucom2000
  • Reply 10 of 98
    davendaven Posts: 514member
    maxit said:
    I agree. HomePod, AirPods and Apple TV are maybe the only products in current Apple lineup to be rightly priced.
    I can’t understand why HomePod isn’t distributed worldwide... I would be glad to buy one in Italy.
    So “rightly priced” to you means break even or sell at a loss? Do you work for free or pay your employer to work?
    cornchipbonobobcharlesgrespscooter63watto_cobra
  • Reply 11 of 98
    macguimacgui Posts: 1,176member
    MisterKit said:
    The technology in HomePod is indeed not appreciated by many. It’s in a class of its own... 
    I'll agree with that much. I'd need some clarification on the 'at any price' bit. I've got a HomePod and at $249, I've been happy with my purchase.

    But Apple could open the functionality up with firmware/software updated to give us a richer experience. It bugs me that they play an 'eco-system within an eco-system'game with much of their kit.

    I'm glad I didn't wait until they were more 'improved' to get one, but I'm getting a little impatient for it to be further updated.

    As far as Apple's pricing goes, I find it extremely difficult to believe they'd sell anything as a loss-leader item, by design.

    I think they're still making a profit of the waves of SEs they're selling. I hope this means there's an updated SE in the wings.
    cornchiphodarwatto_cobra
  • Reply 12 of 98
    Sorry I doubt Gruber knows anything about Apple’s pricing. He’s just spitballing.
    gatorguycornchipanantksundaramjbdragonasdasdmrakoplasgilly33macseekerpatchythepirate
  • Reply 13 of 98
    mobirdmobird Posts: 114member
    "Further, HomePod includes high-end features like dynamic audio processing, beamforming, automatic bass calibration and other exotic niceties."

    Don't forget the sound facility Apple built which if I recall is in the multi-millions of dollars. They used it extensively in the HomePod development.
    MisterKitwatto_cobra
  • Reply 14 of 98
    cornchipcornchip Posts: 1,286member
    mobird said:
    "Further, HomePod includes high-end features like dynamic audio processing, beamforming, automatic bass calibration and other exotic niceties."

    Don't forget the sound facility Apple built which if I recall is in the multi-millions of dollars. They used it extensively in the HomePod development.
    Maybe technically selling at a loss if you factor all that in?
  • Reply 15 of 98
    GitcsgbbGitcsgbb Posts: 1unconfirmed, member
    A fake sad story with no facts. Everyone know the game of electronic manufacturing. A company which won't give a simple piece of cable/dongle in $1500 box will never sell anything with lower price. You are nothing but bull shitting.
    anantksundaramirelandSpamSandwichpscooter63gilly33hodar
  • Reply 16 of 98
    "Why is HomePod so much more expensive than these other speakers you can talk to? Well, HomePod, I actually have reason to believe, Apple actually sells it at a loss," Gruber says.

     Speaking non sequiturs. First sign of an idiot.
    macplusplusjbdragonGilliam_Batesmacseekerbeowulfschmidtpatchythepiratewatto_cobra
  • Reply 17 of 98
    ronnronn Posts: 322member
    entropys said:
    That large space Trump has been renting and occupying in Gruber’s head...
    My cue to stop reading the reply and consider using the ignore list.
    jbdragonMisterKitbonobobGilliam_BatesStrangeDaysmacseekerwatto_cobra
  • Reply 18 of 98
    maxit said:
    I agree. HomePod, AirPods and Apple TV are maybe the only products in current Apple lineup to be rightly priced.
    I can’t understand why HomePod isn’t distributed worldwide... I would be glad to buy one in Italy.
    You "agree" that Apple should sell all its products at a loss?
    watto_cobra
  • Reply 19 of 98
    FatmanFatman Posts: 285member
    Apple does not sell any product at a loss or break even. Period. It’s even rare for their margins to be in the single digits.
    jbdragonmike54seanismorrismrakoplaswatto_cobra
  • Reply 20 of 98
    bitmodbitmod Posts: 239member
    MisterKit said:
    The technology in HomePod is indeed not appreciated by many. It’s in a class of its own at any price.
    No. No it's not. Not even close. Not even in the same ball park as other offerings. So far behind you think it's first. 
    Venture into a hifi shop and not your local dollar store - you will be amazed. 
    kestralgilly33kitatithodar
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