October 6, 2010
The second-generation Apple TV is arriving in stores for just $99. Bloomberg Businessweek has concluded that the device costs Apple just $64 to produce. This gives the Cupertino, California-based company a profit margin, something that didn't exist with the original Apple TV, which was released in 2007. The most expensive part, at $16.55, is the A4 processor which is manufactured by Samsung. This chip is also included in the iPad and iPhone 4. The next most expensive component is the $14.00, 8-gigabyte flash memory chip from Toshiba Semiconductor. According to Bloomberg, the original Apple TV sold for $229 which was close to the cost of producing the device. So even with its lower price, the Apple TV will now generate a profit for Apple. Bloomberg said:
The new Apple TV plays TV shows and movies that are streamed from the Web. The previous model contained a hard drive that stored shows and movies for playback later on a home TV. The change in function led to a change in design. Apple TV is now 80 percent smaller than the original, reflecting alterations in its components, says Andrew Rassweiler, an iSuppli analyst who conducted a so-called teardown analysis of the device.Apple would not comment on the findings released by Bloomberg, nor would any of the Apple TV parts suppliers.