Posted Jun 07, 2007 at 09:37PM by Ceasar S. Listed in: Apple Tags: Steve Jobs, iSuppli, Business Week, Apple TV
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Apple TV reels in slim profits - Image 1


Although it may not be apparent, Apple isn't reeling in major profits on any of the Apple TV units they sell. Literally. According to Business Week, research firm iSuppli purchased a unit for US$ 299 and took it apart piece by piece. What they found was that the seemingly pricey Apple TV tag wasn't a Benjamin apart from the total of its parts.

An Apple TV's parts, when broken down and arranged quite neatly, has been found to cost no more than US$ 237 all in all. That's just US$ 62 from the retail price tag (a 20% gross profit margin), although it doesn't include administrative, marketing and production costs.

That's a big leap from most of Apple's 50% gross profit margins for products not related to its consumer computer solutions. Analyst Andrew Rassweiler of iSuppli remarked, "This is certainly a departure for Apple, or at least it's approaching a departure."

"We made some very aggressive assumptions with this device, and by that I mean we assumed low prices on the components," added Rassweiler. When Apple's Steve Jobs said that the Apple TV is a hobby, he probably wasn't joking at all. It may have been more convincing, though, if there were tears.


[Via Business Week] Permalink  |   Email this  |   Linking Blogs   |   Digg It!

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