Apple TV Teardown Shows Device Costs Around $62

A teardown carried out by iSuppli of the Apple TV teardown shows that the estimated production cost of the device including the accessories in the box totalled $61.98 with another $1.97 added for the manufacturing.

The Samsung produced Apple A4 processor is the costliest of the parts with an estimated price of $16.55, followed by the 8GB flash memory made by Toshiba which costs around $14.

Andrew Rassweiler, director, principal analyst and teardown services manager, for iSuppli said that the "The first Apple TV was built like a net top computer. The architecture was basically a stripped down, small-form-factor desktop PC".

Essentially, it is a micro Mac Mini. He notes, like we did, that the Apple TV is nothing more than an iPad or an iPod Touch without display (and without battery as well).

Apart from lower costs of production, using the same components across a range of products ensure software compatibility.

iSuppli believes that the device has only 6GB of free space for caching streaming media with 2GB being assigned to the operating system and device applications.

The bill of manufacturing doesn't account for software costs, research and development, any margins that resellers might want to include, licensing fees, marketing and other ancillary costs.

This means that Apple could be making wafer-thin profits from the device rather than enjoy the double digit margins it gets from products such as the iPod Touch.