The first Apple TV, says principle analyst Andrew Rassweiler, was built much like a net top computer – as in a stripped down, small-form-factor desktop PC. But with a change of design and direction, the second generation Apple TV is built more like an iPad – but with no display. Its A4 processor, WiFi and Blue tooth chip and power management chip are the same “building blocks” used for the iPad and iPhone 4.
Rassweiler says that while Apple’s products are fine tuned for different functionalities, the build similarity between Apple TV, the iPad, iPhone 4 and the iPod touch is “striking”.
Jobs’ second generation Apple TV sits very low on the hardware margin spectrum for its products.
It must really want a hit on its hands – manufacturing for $63.95 and selling for $99 means Apple’s not pitching in its trademark price hitches with steep margins. Still, it is more profitable than the first generation, which “appeared to be a near give-away or subsidized product for Apple,” says Rassweiler.
The most expensive components of the Apple TV make up its applications processor subsystems – supplied by Samsung. So that’s the A4 app processor and the mobile DDR SDRAM. The app processor runs at 26.7 percent of the product’s bill of materials – $16.55.
The second most expensive subsystem is the memory, provided by Toshiba. It is NAND flash, costing $14 and making up 22.6 percent of the bill of materials. Based on 8GB of NAND, only 6GB are used for media storage. The remaining 2GB is used for the operating system. There’s an empty slot in the printed circuit board – meaning there’s room for upgrades, possibly double capacity, if needed but Apple wanted to keep the consumer price point at $99.
Broadcom and Panasonic provide the system’s WiFi and Bluetooth section, costing $7.65 and representing 12.3 percent of the bill of materials. Interface is offered by Analogix Semiconductor’s ANX9836 HDMI transmitter and Digital Audio Interface device, costing $2.60 or 4.2 percent of the bill of materials.
iSuppli says finding Analogix under the bonnet was a surprise – in nearly 1,000 electronic devices pulled apart it’s the first it has seen. Other component suppliers include Dialog Semiconductor in the power management subsystem, Texas Instruments’ 16-bit microcontroller, SMSC’s Ethernet transceiver and Delta Electronics’ Ethernet filter.
The fancy remote control and additional products outside the box are estimated to cost $6.10, or 9.8 percent of the bill of materials.