It is news because there is nothing significant to write. Apple's next event is far off, and they're still too few rumors about unannounced products that haven't leaked to talk about, hence turning to the ever-reliable Gruber for some news...
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Gruber: Apple TV is Sold at Cost, HomePod at Slight Loss
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It is news because there is nothing significant to write. Apple's next event is far off, and they're still too few rumors about unannounced products that haven't leaked to talk about, hence turning to the ever-reliable Gruber for some news...
This wouldn't be surprising if true. Someone with a HomePod is probably a much more likely Apple Music subscriber and someone with an ATV is much more likely to rent and buy from iTunes and is more likely to subscribe to their upcoming TV service.
Apple is just too generous with their pricing. How nice of them!
I do believe Apple sells those two product at cost or at slight loss. Amazon sells Kindle and Echo dot at a loss all the time. Amazon also sells books, ebooks, and audiobooks at a significant loss from time to time. In those highly competitive but highly scalable markets, they do that. Apple doesn't have pricing power in those markets.
On the latest episode of The Talk Show, Daring Fireball's John Gruber discusses Apple TV and HomePod pricing and whether Apple is charging too much for some of its products.
According to Gruber, Apple is actually selling the 2017 Apple TV 4K at cost, suggesting the device costs Apple $180 to make. As for the HomePod, Gruber said he believes Apple sells it at a loss.
Apple sells the 4K Apple TV for $180, and the HomePod for $349, though the HomePod at least is often available at a discount from third-party retailers. When the HomePod was released, estimates suggested it cost $216 to make in raw components, which does not factor into account other costs like research and development, software creation, and more.
Both the Apple TV 4K and the HomePod are priced higher than competing products from other companies like Amazon and Google, and rumors have suggested that Apple is working on lower-cost versions of both devices. For the Apple TV, Apple is said to be developing a stick-style Apple TV device, and for the HomePod, rumors suggest a smaller, cheaper model is in the works.
Gruber said that he also suspects the AirPods are priced close to cost as well, though he's not sure and can't prove it. And, of course, overtime, things become less expensive to manufacture as component costs come down. Something that cost $180 in 2017 might not cost the same in 2019, as an example.
Overall, Gruber says that Apple isn't pricing its products too high, it's developing products that are too good.
"If you think it's a problem that these products are so expensive compared to their competition, that too few people buy them, it's not because Apple is charging too much, it's because Apple engineered and designed too good of a product," said Gruber.
(Thanks, Ryan Jones!)
Article Link: Gruber: Apple TV is Sold at Cost, HomePod at Slight Loss
How can an apple tv be sold at cost when its running an a10? Thats a legacy chip. The Apple TV is made out of plastic and is tiny. I cant believe that the component cost there is more then like $80. Homepod? I could see that being around $250 in component cost but $350 is just exorbitant if you know anything about the speaker market $350 in straight component cost can get you far more speaker then a homepod albeit less nice in appearence so that seems dubious
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And if Gruber says it, it must be true.
When was the last time John Gruber wrote something that was so profound you read it and said, "That's interesting, I never would have thought of that." A visionary he is not.
There's a reason why he is able to get Apple Executives on his show, and it isn't his scalding hot takes.
There is no question that the HomePod sounds better than any of the other home voice enhanced speakers. No way. I've worked with hem all. So yes, it is probably more about good sound than being more crap from Amazon. And yes, it feels like a far beer build. There are plenty of people who prefer to buy subpar products. Android's made a huge market of it.
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Why?
these 200 dollar ram upgrade for 16gb option sure worth every penny right?
If they do sell something for a loss, they make it up with the iPhone and MacBook Pro!
Apple is a non-profit company, m’Kay! LOL
Gruber the Apple shill. Honestly, some of the most stupid comments this guy has uttered.
"Like they really are like a $180 box"
...are rumors coming from 16 year old high school girls now?
...are rumors coming from 16 year old high school girls now?
Not only is this sort of thing good for the "ecosystem," but if this is true, it is actually a smart strategy that would make sense in the long run. Think of both of these products as similar to video game consoles that help to make money selling software. But with the Apple TV, the extra revenue will come from movie rental and sales as well as other media transactions. I've been bitter about the long neglect and eventual discontinuation of the Thunderbolt Cinema Display and the Airport routers, but if Tim Cook understands the "ecosystem" thing enough that he decide to sell both of these products at basically cost, then I'd be impressed.
Conveniently leaves out iphone and macbook.
give me some of whatever this dude is smoking
give me some of whatever this dude is smoking
I’m normally a fan of John Gruber but he sounds like he’s in a cult here (or working PR for them).
It’s almost as if his entire livelihood depends upon this company.
An anonymous poster gets rebuked by another anonymous poster.
I believe the ‘reliable little birdie’ that John refers to is actually Peter Krieg, which is an alias for Simon Gruber — John’s older brother. Case solved.
Makes sense. For a marketing focused company like Apple, prices correlates more to the perception of the value of the products by consumers, not the cost. It makes sense then for the non primary products such as Apple TV to be sold closer to cost or less as they are not a must-have device for consumers, unlike a phone.
And those that still think the prices of AirPods or HomePod are expensive, you should actually see the competitors as they are not that far off in terms of pricing, and some even less user friendly.
And those that still think the prices of AirPods or HomePod are expensive, you should actually see the competitors as they are not that far off in terms of pricing, and some even less user friendly.
The cost of components isn’t the only cost any item has. There is also advertising, shipping, warehousing and the ever present clerical/accounting. I have no idea how much or how little Apple makes on these products but I think people are over estimating what Apple makes as a profit on these two particular products because they haven’t sold up to expectations, so that is increasing the cost at least for storage.