Apple Selling Apple TV Near Cost?

[MacRumors]

Computerworld's Seth Weintraub first speculated that Apple is subsidizing the cost of Apple TV with their new movie rental sales. Indeed, Apple dropped the price for the Apple TV ($299-$399 -> $229-$329) at Macworld 2008 -- but this discount was only reflected in the U.S. and Canadian markets. To be fair, Apple's international pricing has always been higher than the U.S. counterparts, but this discrepant price drop did raise some eyebrows.

To followup, Gizmodo asked iSuppli for the current materials costs for building the Apple TV. According to their numbers, the $229 40GB Apple TV costs $208.20 to build while the $329 160GB Apple TV costs $235.70 to build. This includes raw component costs alone without taking into account assembly, packaging, shipping, and development costs.

These 10-30% margins are significantly lower margins than Apple typically enjoys on their hardware products, suggesting that they are indeed aggressively pricing the units to drive more sales. The Apple TV was originally launched at Macworld 2007 but was reportedly met with modest sales. Apple revamped the Apple TV at this year's Macworld with the inclusion of direct-to-tv movie rentals. This revamped software will be available as a free software update to all Apple TV owners.


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[Cleve]

The Computerworld article doesn't go into detail but these boxes would make a great platform on which to hack. With margins so low and the Apple TV being such a good piece of hardware, there are lots of interesting opportunities!

[jciapara]

I think $ 229.00 is just about a right price. I will definitely buy one in the near future.

[eddx]

I think this is the right price for this device and I think we can all understand why Apple can justify selling this device with such low profits. Respect to Apple for putting technological progression above profits for once (although in the long run, with the movie rentals etc it probably helps the companies overall profit).

[thesdx]

Originally Posted by jciapara

I think $ 229.00 is just about a right price. I will definitely buy one in the near future.

Me too, as soon as I get my HDTV.

[retroneo]

It's approaching 1 year old. Surely it's cheaper to make it now, considering there are no hardware changes????

[Demon]

All the news about Apple TV is great, but when is the damn update? I've actually gone and rented some movies only to find out i can't stream them to my Apple TV.
But i'm still really excited about the idea that i can now get my TV shows and Movies via the internet even when i'm no longer in the US.

[caliguy]

I would buy an Apple TV, but considering my HDTV only has two HDMI ports, I don't think I will.
One of the ports is occupied by my DirecTV box, the other by my PS3.

Also, 720p definitely isn't 1080p, especially on a 57" TV. I wish Apple would have offered the best available.

[Callaway]

Originally Posted by Demon

All the news about Apple TV is great, but when is the damn update? I've actually gone and rented some movies only to find out i can't stream them to my Apple TV.
But i'm still really excited about the idea that i can now get my TV shows and Movies via the internet even when i'm no longer in the US.

According to this site, February 1st.

http://appletvsource.com/content/view/538/1/

[swingerofbirch]

Interesting...seems like a market Apple knows it has to be in even though it doesn't have a revolutionary vision (or is limited by the media companies to the extent it can't have a revolutionary vision).

I'm not terribly interested in this product, but I think if HD rentals are to remain competitive with Blu-Ray, which has far higher quality and bit-rate (I think the maximum on the Apple TV is only 5 mbps), Apple needs to up its offerings.

Apple TV has always seemed like Apple putting some electronics in a box and somewhat embarrassingly putting it on the shelf and saying, "Does someone want one of these?"

"No you don't?"

"What if we add pay per view movies, do you want it now?"

It's the complete opposite of the iPod which had a clear simple vision and the message, "You want one of these."

[GeekLawyer]

Originally Posted by caliguy

I would buy an Apple TV, but considering my HDTV only has two HDMI ports, I don't think I will.
One of the ports is occupied by my DirecTV box, the other by my PS3.

Also, 720p definitely isn't 1080p, especially on a 57" TV. I wish Apple would have offered the best available.

If your TV has component inputs as well, the AppleTV will work for you. I've used it with component and HDMI and I can't discern a difference at 720p or 1080i. Just send your sound to the TV or home theater system through optical sound output or RCA jacks from the AppleTV.

[bacaramac]

Originally Posted by retroneo

It's approaching 1 year old. Surely it's cheaper to make it now, considering there are no hardware changes????

Based on an old thread about ATV costs, it was projected at $235 a while back. It appears if these numbers are accurate, that it has indeed become cheaper to build.

[Stella]

AppleTV was a bit of a flop. Perhaps they want it as cheap as possible.

Although, if Apple can take the digital movie market like they've done with digital music then the benefits will out weight this.

Despite the original AppleTV looking like a complete dud, the new firmware looks as though AppleTV will do better this time round.

[ChrisA]

Originally Posted by jciapara

I think $ 229.00 is just about a right price. I will definitely buy one in the near future.

Even at $230 Apple will have an up hill battle with this. Most consumers are used to getting their set top boxes for free when they sign up for some new service. With ATV Apple is asking you to pay $230 up front just so you can rent their movies. They would have done better to give the ATV away with a movie download subscription service. The price could have been the same in the end.

[GeekLawyer]

I know I'm excited to see what Apple comes up with for this platform. I'm so ready to ditch Comcast and Netflix over the next few years just like I banished Sam Goody and Tower Records over the past few.

[flopticalcube]

Considering that its a "hobby", it doesn't really need to be a money maker, yet.

[nerdbert]

Originally Posted by jciapara

I think $ 229.00 is just about a right price. I will definitely buy one in the near future.

I would think so too if it wasn't for all the reencoding I'd have to perform in order to watch all the stuff I've legally purchased. If it was around a hundred bucks I would really consider it, but 229 seems to be a lot for a device which isn't even the center of a TV setup - I still need a DVD player and some devices to receive cable and terrestrial broadcasts. Compared to what is thinkable this box really goes a long way.

[scrambledwonder]

The Apple TV is great. Now all I need is a regular TV . . . Why not an Apple TV with a screen? How sexy would that be, a 42-inch aluminum HDTV with all the guts of the Apple TV in it?

[solipsism]

Originally Posted by MacRumors

To be fair, Apple's international pricing has always been higher than the U.S. counterparts, but this discrepant price drop did raise some eyebrows.

Apple lowered the price because it will make a fair amount of money on each rental.

Sicne these rentals have only been worked out for the US market there is no reason for lower the price overseas. As for Canada also getting the lowered device it may to its proximity to the US as it's not uncommon for Canadians to have easy access to US iTS gift cards and have US Credit Cards.

[ChrisA]

Originally Posted by Cleve

...these boxes would make a great platform on which to hack. ..

Yes, people have already put Mac OS X on them. It's Apples lowest priced Mac. Would be nice if there was a why to add more RAM.

Lots of people have put Linux on the ATVs. and they make nice front ends for Myth TV. "Myth" is a bit better firmware than what Apple sells.

[Derbus]

My girlfriend got me one as a late xmas present and I can't wait to set it up, I hate driving out for rentals, cuz, well... im lazy

[tothelimit]

Originally Posted by Callaway

According to this site, February 1st.

http://appletvsource.com/content/view/538/1/

Someone responded to claim in your link saying that they were told by an apple employee the update would come tomorrow (Jan 29) ... I certainly hope that is the case. I'm itching to rent my first HD movie on it

[quantumbits]

Originally Posted by Cleve

The Computerworld article doesn't go into detail but these boxes would make a great platform on which to hack. With margins so low and the Apple TV being such a good piece of hardware, there are lots of interesting opportunities!

My thoughts exactly. My only concern is that Apple likely adjusted the firmware to disable all of the published hacks thus far. Its a shame because AppleTV + Time Capsule = a potentially uber cool and reasonably-priced home server package (especially when you consider that Time Capsule comes with an enterprise-level hard drive).

[NewSc2]

As someone who's been interested in a set top box... I'm still leaning towards a Mac Mini. It's quite a bit more expensive but can do so much more, without the need to encode all my videos to the same format.

[solipsism]

Originally Posted by scrambledwonder

The Apple TV is great. Now all I need is a regular TV . . . Why not an Apple TV with a screen? How sexy would that be, a 42-inch aluminum HDTV with all the guts of the Apple TV in it?

And how many different TVs would they have to make. Rear-projection, tube, Plasma, and LCD sets. Then there is HDTVs of varying quality, EDTVs and SDTV that have Component. There are too many possibilities for Apple to be able to cater to a majority with just a couple sets.

Now, if Apple could get with Sony or LG or HP or whomever to create a special holder in the back of most sets for the AppleTV and a passthrough—with the USB cable—to control the IR sensor with one remote.