Comms chips

iSuppli’s AppleTV Teardown: $61.98 in Materials

The new (and smaller) Apple TV box carries a total bill of materials (BOM), including manufacturing costs, of $63.95, giving Apple Inc. (Nasdaq: AAPL) much better margins than its first shot at the product line, according to fresh teardown data from IHS iSuppli

Unlike the first iteration of Apple TV, the second-generation device, which sells for $99 and started shipping late last month, is a streaming media specialist since it doesn’t house a hard drive for downloaded recordings of movies and TV shows. (See Apple TV Arrives and Roku, Boxee Don't Fear Apple TV's Bite .)

Taking it a step further, iSuppli says Apple TV’s more streaming-focused approach owes much of its technical heritage to the iPad and iPod Touch since the internal design and key components are practically spitting images of each other. In fact, several building blocks, including the A4 processor core, WiFi/Bluetooth chip, and power management chips can be found in all three products, iSuppli points out.

“The first Apple TV was built like a net top computer,” said Andrew Rassweiler, iSuppli’s director, principal analyst and teardown service manager, in a statement. “The second generation Apple TV is more like an iPad or iPod Touch with no display.”

The firm says the approach will help Apple dramatically improve its margins (roughly 35 percent) on the new box, versus the initial version, which “appeared to be a near give-away or subsidized product for Apple.”

iSuppli notes that just 6 gigabytes of the device’s NAND flash is likely available for user media storage, with the other 2GB likely reserved for the operating system.

Here’s a truncated snapshot of iSuppli’s teardown of the new Apple TV:

Table 1: Tearing It Down
Function Manufacturer or Description Cost
Apps Porcess w/PoP DRAM Samsung Semiconductor $16.55
Memory � NAND Flash Toshiba Semiconductor $14.00
WiFi/Bluetooth Module Panasonic $7.65
PCB + Other Components Minor discrete semiconductor components, transistors, diodes. $6.74
Mechanical Components Enclosure materials � plastics, metals, hardware, etc. $3.52
Power Supply Delta Electronics $2.15
Interface Components Analogix (HDMI transmitter), Delta Electronics (Filter�Ethernet 10/100 Base T Single Port LAN Filter), SMSC (Ethernet Transceiver) $2.60
Power Management Dialog Semiconductor $1.75
MCU Texas Instruments $0.93
Box Contents Aluminum single piece body remote control, two-meter power cord, literature, and packaging. $6.10
Total BOM (materials only) $61.98
Estimated manufacturing costs $1.97
Total BOM (with manufacturing costs) $63.95
Source: iSuppli. The firm notes that its teardown assessment does not factor in other expenses such as R&D, software, licensing and royalties.

— Jeff Baumgartner, Site Editor, Light Reading Cable

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