“When Apple CEO Steve Jobs called Apple TV a ‘hobby,’ he wasn’t kidding,” Arik Hesseldahl reports for BusinessWeek.
“By typical Apple standards, the new set-top video box may as well be a hobby given how unprofitable it is in its current form. That’s one conclusion you can draw from research firm iSuppli’s analysis of the innards of the device, which connects a TV to videos stored on a Mac or Windows computer,” Hesseldahl reports.
“Having taken it apart, iSuppli estimates that the components and materials used to make Apple TV cost $237. Since Apple sells it for $299, that would leave a gross profit of $62, or about 20%, before marketing costs,” Hesseldahl reports.
“‘This is certainly a departure for Apple, or at least it’s approaching a departure,’ says Andrew Rassweiler, analyst with iSuppli. ‘We made some very aggressive assumptions with this device, and by that I mean we assumed low prices on the components.’ If the costs were much higher, ‘we’d be looking at a device that Apple was subsidizing,’ perhaps in hopes of making up the difference with video content deals, Rassweiler says,” Hesseldahl reports.
Full article, including descriptions of components that make up the Apple TV, here.