No offence, but these comments baffle me. Companies that didn't make "too much money": American Motors, Studebaker, WT Grant, Packard Bell, AMF,...
As a Apple shareholder, I kinda like it that they make "too much money."
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Apple TV Cost Breakdown
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No offence, but these comments baffle me. Companies that didn't make "too much money": American Motors, Studebaker, WT Grant, Packard Bell, AMF,...
As a Apple shareholder, I kinda like it that they make "too much money."
BusinessWeek is reporting on research firm iSuppli's analysis of how much it is costing Apple to assemble the Apple TV.
According to the report, Apple's margins on the product appear to be uncharacteristically slim from a consumer electronics product. While Apple is used to margins in excess of 50% on such products, iSuppli estimates the 40 GB Apple TV's bill of materials at $237, leaving a margin of $62 (approximately 20%). The newly released 160 GB version of the Apple TV is estimated to have a better margin at 30%.
While calculated gross margins are relatively easy to calculate given a bill of materials, it's important to note that while Apple may average 50% gross margins on a calculated market price basis, they average around 20-25% net profit according to their SEC filings. Having a calculated gross margin of 20% means that the net profit is likely very darned close to 0% (you can't relate the two directly, as internal costs are different for different devices).
You are forgetting that in the UK the 160Gb appleTV is currently at £269, so an extra £31 is not that much. There is also the convenience of just having one box.
People tend to get offended by comments like that, but it is a very understandable complaint. For many people then AppleTV is a gateway to the iTunes store.
Many people want to buy video/tv but unless they can get it on their TV then they don't see a point to buying. This device makes that transition simple so similar to gaming systems, why not sell at a loss and make the profits in games (movie sales). The most important part of getting iTunes to go mainstream is to get the equipment in the hands of the consumer.
I just don't get AppleTV at all. $399 to watch low quality movies, TV, and YouTUBE on your big screen HDTV? What's the point? The stuff isn't even DVD quality! Are they insane?? I'm a big Apple fan, but MS really got the XBOX 360 right. For that same $399 you get an awesome gaming system and an HD media center. They offer HD movies at a rentable price. You can order all this right through the system. I thought for sure Apple would have leapfrogged everyone with HD content from iTunes. They used to be about delivering quality. I just don't see it in AppleTV.
I didn't realize till now that the Xbox allows me to play all my itunes music, view my iphoto library, view movies I make or rip, watch Youtube videos, all with a seamless interface and virtually no noise. Thanks for the info...
Oh Yes, and I forgot... use it as a hotplate...
I expect that Apple are paying Intel far less than $68 for the combination of low-end last generation Pentium M and outdated chipset. OTOH I thought the graphics chip would cost Apple more...
iSupply can be quite variable and inconsistent. Witness their XBox360 costings ... however their task isn't easy given they often try to guess the price of components where cost and agreements are hidden.
Apple are probably also using this as a proof of concept device, a testbed for their consumer device Mac OS X, and a first generation device too. They'll want to make a significant profit on generation 3 in two years time, for now it's a 'hobby' that might promise opportunity later.
iSupply can be quite variable and inconsistent. Witness their XBox360 costings ... however their task isn't easy given they often try to guess the price of components where cost and agreements are hidden.
Apple are probably also using this as a proof of concept device, a testbed for their consumer device Mac OS X, and a first generation device too. They'll want to make a significant profit on generation 3 in two years time, for now it's a 'hobby' that might promise opportunity later.
It's $299 for twice the storage capacity that the $399 360 comes with; for $399, you get more capacity than the $479 360 Elite (or whatever they called it). I have both, the 360 is in my home theater & the AppleTV is in the bedroom. It's not even close how much more I enjoy using the AppleTV over the 360's media center. Don't forget, the aTV is software 1.0, all of this stuff wasn't available on xbox live at 360's launch, they've had a year and a half to get to where they are. Once they get aTV completely integrated with iTS and start offering the HD downloads that were implied with the 160GB version, you'll start to "get" it...
what is sort of amazing to me is that there is a lot of power in the 
TV, but its not really utilized, that why i think people are having negative reactions to it, its not over priced, the hardware is underutilized.
TV, but its not really utilized, that why i think people are having negative reactions to it, its not over priced, the hardware is underutilized.appleTV is like an alternative to DVRs. They're not trying to compete with TiVO or anything - they don't want you recording shows from cable, they want you downloading them from iTunes. So I would agree that apple has no interest in the DVR market, but if the store had HD content at the same prices, it wouldn't be a shame at all.
what is sort of amazing to me is that there is a lot of power in the
I like your analysis. It does seem like the device is somewhat underwhelming in terms of all the features that it COULD have. But, as someone above pointed out, it is a 1.0 gadget, and it is clear that Apple is working on expanding the feature set.
Depends on the business model. If they had a subscription/rental HD download service, it would be a killer deal for me. But a la carte purchases of individual TV shows is never going to take off imo.
eh.. I download shows all the time. It's like getting them on DVD which has been super successful. We'll see I guess.
DVR's are only cheap if they're subsidized with a subscription. You didn't get a DVR for $100 with no extra fees, did you?
Sony and Microsoft are losing billions so far on their latest consoles. MS never broke even on the original Xbox. And movie sales aren't that profitable for Apple, at least not enough to subsidize a hardware box. Breaking even isn't too risky, losing money on every sale is.
The base model of the ATV is $299. The base model of the 360 ($299) doesn't seem to include a hard drive and other things that are pretty much necessary. And for me, $399 is just too much for me to pay. And as others have mentioned, we're just at version 1 of ATV, who knows what additional features will be added in software as time goes on (as happened with the 360).
That's only because DirecTV subsidizes it. You have to sign a 2 year service commitment (at a minimum of $50 per month) to get that low price for the hardware. And you are only leasing those receivers, you don't actually own them you know.
What did you buy?
Most DVRs are subsidized by your monthly cable or satellite fees, but maybe you have something I don't know about. That's why mobile phones -- well, not iPhone -- are so cheap.
I hope they are expanding, IMO they dont need to upgrade the hardware for a while, its capable of doing a lot.. just right now.. its not..
Yep, which is actually pretty good. All Apple has to do now is dish out software upgrades and let the early adopters in on the fun. I'd buy an ATV right now, but I'm not sure how my TV will take to it (it has component, but it's just a regular CRT standard ratio set)
Exactly. The unit seems very buggy to me. I have all sorts of issues with it, the most frustrating is that it hard reboots when it tries to read very large itunes libraries, so i basically can't listen to music on it. Additionally, it doesn't give you many display options. For example, the language, year, or director of a movie. I find it tough to decide on something without being able to view those tags. Here's to that youtube update fixing some of these bugs...
I didn't realize till now that the Xbox allows me to play all my itunes music, view my iphoto library, view movies I make or rip, watch Youtube videos, all with a seamless interface and virtually no noise. Thanks for the info...
Oh Yes, and I forgot... use it as a hotplate...
To be fair, the ATV gets hot too.
it does get hot
I agree that it does get hot but I have to admit it's been working quite well for me.
I have over 450 movies ripped and 100G of music and there is _no_ delay in viewing or playing (once the disks wake up). I'm hosting on my mini but am pondering hacking the unit to see an external usb drive and just put everything in a 750G external (my total lib is just over 550G right now). That would let me use the box as a backup source too.
It's an interesting device and for the price I'm happy with it.
I agree that it does get hot but I have to admit it's been working quite well for me.
I have over 450 movies ripped and 100G of music and there is _no_ delay in viewing or playing (once the disks wake up). I'm hosting on my mini but am pondering hacking the unit to see an external usb drive and just put everything in a 750G external (my total lib is just over 550G right now). That would let me use the box as a backup source too.
It's an interesting device and for the price I'm happy with it.
Actually, I was referring to the aTV. I did not know that the xbox has that feature, too.
