Should Apple sell the rumoured iTV set top box for $99, it will not turn out a profit, our preliminary research on the bill of material found out.
The Apple iTV is expected to be based on the iPhone 4 whose preliminary bill of material (BOM) estimate was published by iSuppli at the end of June 2010.
At $187.51, the 16GB iPhone 4 is almost twice the expected retail price of the iTV; the cost includes 3G components, the touchscreen plus the display, the camera as well as other parts like the baseband, the transceiver, the battery, the interface and the sensors.
Even when excluding those though, the price of the main parts, the applications processor, Wi-Fi, the DRAM memory and the 16GB Flash memory reach nearly $60.
Add this to the enclosure, the PCBs, accessories, literature, connectors and the price quickly rises to almost $99. Even a cunning Apple would not be able to slash the price of components significantly.
Then there's other expenses like software, manufacturing, postage and packaging, royalties and licensing fees.
Apple has never sold a piece of hardware at a loss and is unlikely to start with the iTV given that the Apple TV costs $229 in the US and £223 here.
Should Apple release the Apple TV as an accessory for the iPhone or the iPod Touch instead? What features would you like to see in the iTV?