The $99 Apple TV is Made of $64 Worth of Parts

[zak_mckraken]

I'm actually impressed. I would have expected the parts to be around 30-40% of the unit's price. Of course, that's the kind of product where initial profit doesn't matter as much as the profit that will be made when the customer begins to stream stuff.

 

[zachary k]

i see what they are doing, start it low and get everyone interested in it, but by the time a new generation comes around and everyone is buying it, BOOM massive price increase.

 

[gnesterenko]

Done caring about anything Apple does. The iPod classics are/were awesome, but they aren't even paying attention to that product line anymore. Cheers Apple. Call me when you start listening to your consumers.

"The views expressed here are mine and do not reflect the official opinion of my employer or the organization through which the Internet was accessed."

 

[Guest]

im with footsoilder, it's kind of like inkjet printers really, you end up paying more for the consumables then the printer itself

 

[mbmcavoy]

I'd be curious to see a component cost breakdown of a typical home-brew gaming PC, including the OS. I'd bet we would see similar margins...

 

[Guest]

They need to make money somehow. If you're not okay with that, then don't buy it.

 

[megamanx00]

Meh, still don't care about Apple TV

 

[pharge]

[citation][nom]zachary k[/nom]i see what they are doing, start it low and get everyone interested in it, but by the time a new generation comes around and everyone is buying it, BOOM massive price increase.[/citation]

No really. Apple's way is ... keeping the price the same or even drop the price, while only adding new features into the new version or change the design of the new version so people will trash their old one and buy a new one.

 

[failboat]

and I still wouldn't pay 64 for it.

 

[razor512]

Do they take into account volume discounts when apple is ordering bulk shipments or are they considering the cost of if they were to buy the replacement parts them self or a small shipment?

 

[whyzee]

Thats apple for you, folks!!

 

[xerroz]

Like someone said previously, these prices are based on what a consumer would get. If apple were to buy these parts in bulk by the thousands they could be getting that processor for $10 cheaper or that flash storage for $10 cheaper, in the end they pretty much pay around $20-30 for the whole crappy thing. Which to me is not surprising at all, seeing how their laptops parts would cost $200 but they sell it for $1200 anyway

 

[mrmez]

Really? A 'consumer' can buy an A4 chip for $16.55????
Do they sell these on ebay? I couldn't find them anywhere.

Also, have you ever looked at tray prices for cpu's for example?
On anything popular there is hardly a discount.

Again, actual parts are only a tiny portion of what it costs to make something.
There are scientists and engineers designing chips. Industrial design teams to make a pretty form factor. Factories like foxconn to make and assemble components. They have massive overheads to cover. Didn't they spend around a million dollars on prototype production machines just to make the iPhone 4 antenna? Employees there have also received big pay rises recently. Packaging. Some guy to design the packaging and manuals etc. Every product needs to be shipped and insured. There are warehouses and intermediary deliveries along the way, they all get paid too. Then it ends up sitting in an Apple store or delivery warehouse. Store's need to cover their overheads, rent, outgoings wages etc etc. Almost there folks... finally once everybody is paid, the shareholders want some cash, then tax man squeezes your tit, and the table scraps left over are yours to keep.

If all of that doesn't satisfy you, its a free market economy. Shop elsewhere 😉

 

[verbalizer]

will the truth hurt apple or not.?