BusinessWeek and iSuppli partnered to analyze the costs of the AppleTV. Somewhat surprisingly, the $300 gadget was found to cost nearly $237, which yields a significantly lower margin than the iPod or iPhone.
Even more interestingly, the analysis shows that Apple makes significantly more money on each $400 AppleTV they sell, as the cost to upgrade the drive is much higher than the difference in raw cost to Apple. It is uncharacteristic for Apple to make this little of anything they sell. Anyone think this might be the source of Steve’s calling the device “a hobby”?
Thanks, Bill!
Technorati Tags: appleTV, margins, profit
Pete Mortensen is a design strategist for consulting firm Jump Associates and the co-author of Wired to Care: How Companies Prosper When They Create Widespread Empathy, a book and blog that are significantly more interesting than you might initially think. Pete’s particular Apple avocations are both around design–interface and industrial. Follow him on Twitter!
