“John Gruber of Daring Fireball fame has made some astonishing claims on an episode of The Talk Show,” Paul Morris reports for RedmondPie. “The well-placed tech writer and Apple commentator has suggested that Apple sells its 4K Apple TV at cost and that the company actually makes a loss on each HomePod speaker it sells.”
“Yes, you read that right, according to John Gruber, Cupertino-based Apple Inc. goes to market with the 4K Apple TV priced at $180.00, which he believes is the exact same amount that the company pays to manufacturer each unit,” Morris reports. “He has also heard similar information pertaining to the company’s intelligent Siri-based speaker, the HomePod.”
“‘Apple actually sells [HomePod] at a loss. I can’t prove it. I don’t think it’s a big loss,'” [Gruber said],” Morris reports.
Read more in the full article here.
MacDailyNews Take: When you think about the technology inside both the Apple TV 4K and the HomePod, plus packaging, marketing, etc., we can easily see zero or worse margins on those products. They make up for it with app subscriptions, iTunes sales, and Apple Music memberships.
Yes, indeed. Ye Ole Razor Blade model. And if you grabbed the Homepods at the pre-Christmas $100 markdown price even better deal. Won’t take them long to make it all back plus.
The only way Apple is losing money on these products is because NOBODY IS BUYING THEM.
We all know Cook was late to the game with a 4K streaming box. When they finally pushed it out the door for $200, the competition was selling them for 50 bucks.
The Homepod is just a joke. There are too many other options out there with better hardware that support multiple streaming platforms. Plus Cook getting greedy with parallel streaming didn’t help the situation.
Lord HawHaw at it again I see and probably as drunk lol.
ZeroRandy – NOBODY IS BUYING YOUR MOO CACA, that’s what nobody is buying.
You keep up with your Von snogg d’élisions though, that’s what keeps you going, right?
Guess for your chance to win a new set of kitchen appliances.
Am I getting paid?
Or am I a mentally ill loser with no life?
No, that’s not the only way.
Another way is to bill that hardware product with a high cost for its software support.
You know – – so that the “Services” Dept. can be reported as having a 60% profit margin.
(and as per last week’s quarterly report, Apple did admit that hardware divisions are paying for part of Services … we just don’t know how by how much, etc)
Sorry, just don’t believe it. If they’re paying the full retail price just to manufacture a unit, they’re not breaking even, they’re losing a ton. Retailers (Amazon, Target, Best Buy) have to add their markup. Then there’s shipping, taxes, inventory, etc. etc. etc.
It’s as absurd as iFixIt’s cost breakdown of the components in an iPhone, as if that actually represents the cost of bringing an iPhone to market.
Seriously, the ATV at a loss? Straighten me out here please. One can buy a competitor’s device with similar function at > half the price that has greater functionality/more features and Apple is losing $$ on their device? Add to that the disbelief that Apple simply has a product that’s “red” per margins.
All terrain vehicles are expensive, but with $200 billion in the bank, Apple can take a loss if it wants tlk
Except for possibly R&D and an older A-series processor, I don’t see what makes an AppleTV better than a Roku Ultra, at least for watching video content. I’m not interested in games so I don’t count that as a plus for the AppleTV. I’d swear Apple was profiting on selling the AppleTV but I don’t have any insider knowledge about what goes on at Apple.
All I know is I’ve been happy with owning Roku devices and I won’t be buying an AppleTV. I like Apple products but I don’t think that AppleTV is worth the price for my use. A Roku Ultra goes for about $90 and that’s perfectly priced, in my opinion.
For someone not already invested in an ecosystem, the AppleTV is faster and more “future-proof” than any of the Roku units, and has a more logical user interface (with the exception of that stupid remote).
For someone already invested in the Apple ecosystem, it makes no sense whatsoever to get a Roku; an AppleTV “just works” with all their existing devices, but a Roku requires doing things differently each and every time.
For someone already used to Roku, sticking with it is likely the way to go.
No way – Amazon sticks etc sell for a lot less and have similar tech. Apple never sell at cost. It absolutely goes against everything they do.
I try, but I can’t justify to people that an AppleTV is worth the costs when you can buy 3 Amazon FireSticks HD for the less than an AppleTV or 2 FireTV 4k units for the same price and the UI and Alexa are great. Apple’s innovation speed has become glacial. I truly believe it is because they have NO FREAKING idea what is going on outside of their new fortress and thus no focus or sense of direction, and no matter how nice a guy he is, vision is not coming from Tim Cook.
Depressingly they seem to have to watch what others bring to market to decide whether it’s worth their own efforts to attempt to match it. Even then it’s like re-inventing the wheel to achieve it. Home Assistant the perfect example for they had all the ingredients including the iPad mini to do the job, see what Amazon introduced and decided to spend big and long to to out do it in some way (ie sound quality in this case) by the time this comes out there’s a move to a video screened assistant upgrade and a year later these are selling more and more. And when you look at them what do you see? Oh yeah an imitation iPad mini with tweaked voice input capabilities always available. Hey Apple you could always re invent the damn iPad mini to compete I guess if you don’t want to look too embarrassed about having the device in existence all along had you only seen it ignored in the corner of your Office.
Everything in your post is 100 percent except the inferred surprise that “watching others” is something new that Apple JUST started doing, like, last year. “Watching others” is literally almost EVERYTHING Apple has done for YEARS now. 🙂 MP3 player, CD burning, music curation software… Apple’s history is littered with seeing what other companies have done and making an Apple-ized version of it. For every ‘first wide screen laptop’ or ‘first postscript printer’ there are hundreds of ‘me-too DAW workstation’ or ‘me-too presentation app’ or ‘me-too tablet’ or ‘me-too speaker’, ‘me-too browser’ etc.
Own both the ATV and Roku and there is little other than the remote to differentiate the Apple product on the HW side. The ATV remote would be better without the current design’s touchpad interface and probably cost far less to manufacture.
The speaker is a joke. Know lots of people who own iPhones, who own Macs, Apple Watches, iPhones, iPads or Apple TVs- do not know anyone who owns or wants the speaker thing. Every time I set foot in an Apple Store the speaker is just sitting there ignored by the crowds. Until Apple makes something better they need to leave that market alone.
I would buy an Amazon Dot type device that connects my home stereo to the Apple ecosystem but have no interest in a spy in the sky speaker with the underwhelming Siri technology and marginal sound quality tethered to Apple’s lossy DRM laced rental media. Having invested in high quality Focal systems in both my Living Room and Bedroom, why would I want that speaker thing? A small device to integrate Apple’s media into the mix would be great, but not that low quality speaker.
DavGreg… that speaker thing has better sound quality and listening technology than Aluxa or Google by a mile. And, if you want to integrate Apples media, look for a solution, there are several.
Last, only Amazon & Google are using their speakers to spy. Apple has taken the high road here.