According to a new study out today by iSuppli, Apple Inc. is breaking even or possibly suffering a loss in profit from its new streaming device, Apple TV.
The standard 40GB device costs about $237 to produce, meaning the company is only receiving a $62 profit with the sale of just one Apple TV. The cost for all of its components is spread out pretty evenly; the 1GHZ Pentium M is valued at $40, while the 40GB hard drive is about $37, the mainboard is $28, and the GeForce Go 7300 graphics and 802.11n Wi-Fi chips cost $15 and $19 each.
Andrew Rassweiler, an analyst at iSuppli, believes that the addition of a 160GB version of Apple TV could potentially assist in boosting the profit margins. Adding the larger drive only costs $37 more to production, but allows the company to raise the price $100 for this expanded version.
As with all of Apple’s products, I am sure we will being seeing updated versions of the device in the future. Currently, Apple is one of the few companies producing hardware that can stream computer content to TV’s and in turn has helped established a somewhat non-existent market for such devices. As we look to the future, Apple will soon be facing a little friendly competition from Sling Media’s SlingCatcher. Not to worry, I highly doubt the company will suffer greatly since iPods and Macs have a much higher profit margins, and the upcoming iPhone is believed to have as much as a 50 percent gross margin, which it will then split between itself and AT&T.
