iSuppli took a look under the hood of the Apple TV to investigate how much this device costs Apple:
Having taken it apart, iSuppli estimates that the components and materials used to make Apple TV cost $237. Since Apple sells it for $299, that would leave a gross profit of $62, or about 20%, before marketing costs.
That would be a big change from Apple's penchant for gross margins in excess of 50% outside its computer lineup. That's been the usual case with the iPod music player family (see BusinessWeek.com, 9/20/06, "The Skinny on Apple's New Nanos") and appears to be the case with the iPhone, the release of which is now less than four weeks away (see BusinessWeek.com, 1/18/07, "What the iPhone Will Cost to Make").
Apple TV's slimmer-than-usual gross margin is also interesting when set against the fact that Apple plans to book the associated costs and revenue over a two-year period. So for every Apple TV sold, the company will split the revenue into chunks reported over eight quarters, at a rate of $37.375 for each period. Dividing iSuppli's cost calculation similarly, $7.75 of that total will be profit.