What the Apple TV costs Apple

iSuppli tears down the Apple TV to reveal its cost and its clever design. With the price of the latest incarnation of the device, Apple has improved profit margins.

Brooke Crothers Former CNET contributor
Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.
Brooke Crothers
2 min read

The second-generation Apple TV went under the knife again. This time iSuppli tore the TV down to reveal its cost to Apple at just less than $64.

The "Cadillac" of set-top boxes carries a bill of materials of $61.98, including additional items boxed with the product, according to a preliminary teardown analysis firm iSuppli. When adding the manufacturing costs, the Apple outlay rises to $63.95, iSuppli said. The assessment does not take into consideration other expenses such as R&D, software, licensing, and royalties.

As reported previously, Apple TV's internal design and key components are remarkably similar to those of the iPad. "The first Apple TV was built like a net top computer. The architecture was basically a stripped down, small-form-factor desktop PC," said Andrew Rassweiler, an analyst at iSuppli. "The second-generation Apple TV is more like an iPad or iPod Touch with no display. The Apple TV's A4 processor core, Wi-Fi/Bluetooth chip, and power management chip are the same building blocks used in the iPad, iPhone 4, and iPod Touch," he wrote.

And Apple has improved the profit margins this time around. The original Apple TV was sold at prices that weren't much more than the underlying hardware costs. But, at $99, the second-generation product's price is well above its bill of materials and manufacturing cost, according to iSuppli.

Hardware of note includes the Samsung-manufactured Apple A4 application processor and accompanying DRAM ($16.55), the Toshiba flash memory ($14), the Panasonic and Broadcom Wi-Fi/Bluetooth component ($7.65), and the Analogix HDMI transmitter and Digital Audio Interface device ($2.60). It's worth pointing out that Apple has alternative suppliers of flash memory, so this may not necessarily be Toshiba in every case.

From a pure build standpoint, the TV appears to be machined from a solid piece of aluminum, iSuppli said. "It's a clever and a detail-oriented piece of design that makes the [TV] very pricey and very unique to Apple."

Samsung's processor and the closely linked DRAM tops the bill of materials.
Samsung's processor and the closely linked DRAM tops the bill of materials. iSuppli--preliminary assessment