Comments on: Apple TV: Whence the profits?

Analysts' price breakdown of device indicates Apple may be focused more on iTunes profits than unit sales of the set-top box.

[hal Summers]

Cost for whom?

Is the price breakdown for what APPLE pays for the various parts
or what they cost others to buy. I'm sure Apple gets a very large
volume discount on whatever parts they but and they leverage
that power (as well as the vendors hope for future business) to
get a much better price than is normally available. Apple is not
running a charity and their margins seem to be in line with one
would expect. Just look at the stock. The market tanked the
last three days and Apple went up. They're not getting that type
of performance by giving stuff away.

[chinesejudge]

Did you actually read the article?

They explain in the article that they take into account the volume
discount that Apple would most likely receive. Even if the
technology isn't on the "bleeding" edge, it still costs money. iSuppli
is pretty good with their cost estimates (look at their breakdown of
the costs of the nexgen consoles). The point of this article is that
Apple typically has a larger "gap" in component cost to retail price
on hardware than other manufacturers, but not this time.

[Stan Timek]

Apple TV business model

The Apple TV is many things to many people, what it isn't is a loss-leader. The device is sold at a profit (how much is fodder for great speculation) but rest assured - with Apple's supply chain they're getting great deals on all these components.

Many people have argued that the Apple TV is comprised of yesterday's technology. If that's the case just think of the deals Apple is getting to help move "old" tech/inventory/whatever you want to call it.

As the article says though, content is king and Apple has been building and molding its business to include the high-volume sales of content for quite some time. The great media companies are scared of the digital future, Apple is creating and embracing it.

Stan Timek

www.pollywogtheater.com
www.HD4AppleTV.com

[MadKiwi]

At least it IS a profit

As opposed to loss leaders such as, say, the X Box 360...

[dhavleak]

Whoa! Easy there..

The article isn't _criticizing_ Apple -- it's just an analysis of what Apple is attempting to do with AppleTV.

No need to start yet another Apple-vs-MS pissing contest. Pffffff..

[edgedesign]

A Stealth Trojan?

While many continue to focus on the iPhone and the next version
of Mac OS X, Apple TV is slowly creeping into people's homes.
Apple TV seems to have dropped into the shadows, but it's
future may surprise you. Some columnist have even lambasted
the device declaring it delivers poor video quality and nothing
too exciting. Time will tell... think about these things:

- It runs OS X
- HDMI output
- Supports 1080i/720p
- Apple can add/upgrade features at any time via the internet
- YouTube is coming to Apple TV (who may follow?)
- h264 quickly becoming a standard and it's on iPod/iPhone
- Gaming device?? Download games via iTunes; Bluetooth
controllers?
- An HD DVD player costs double the price
- An HD DVD player will not get new features after purchase
- HD DVDs cost $40-$60 each
- No declared winner for HD DVD format yet
- Apple will eventually sell HD content via iTunes

[Stan Timek]

Apple in the living room

Edgedesign you're absolutely correct in stating that the Apple TV is a stealth device. As it stands it does a great job at being an "iPod for your TV" or an "Internet DVD player." I use mine to play videos (SD and HD), music, slide shows, podcasts and the whole family gets a kick out of it.

The video quality I think is great even for SD since most of the material is master quality and hasn't gone through the process of being broadcast or compressed fifty times by the cable company.

Is the HD quality good? Heck yes! As you mentioned a few people are saying that it's not real HD because its compressed heavily - what do they think they're getting from their digital cable feeds if not heavily compressed pictures that have gone through multiple generations of compression!

I work in video production so I can be a terror when it comes to quality - but I learned long ago that it isn't the best quality signal that gets the best ratings - it's the best story.

Stan Timek

www.pollywogtheater.com
www.HD4AppleTV.com

[DaiMac]

aTV is XBMC for the masses...

Just hit google and look for directions on modding an Xbox to
work as a Media Center (original flavor, though the 360
directions aren't much better), a fairly intense procedure even
now, years after the device's initial relase and hacking, and then
go to a site like AwkwardTV (http://wiki.awkwardtv.org/wiki/
index.php?title=Main_Page#How_To) and look at what has
already been done to the aTV in less than 3 months in terms of
hacking and how (relatively) easy it is. You can even send your
box off to get the HD upgrade if you like, though of course the
best stuff is what you can do once you've put sshd on it. Already
people have developed an automated plug-in system to manage
software plug-ins on the box (rather than on your own machine)
and a fully functional USB patchstick to enable hacking the
machine without opening it at all is being worked on.

aTV, with the addition of new content from iTunes, has enabled
me to replace my cable box almost completely for a relatively
competitive price per month. If they ever get live sports on it the
much promised "internet killing traditional TV" idea might finally
come true.

Once HD content is in the iTunes Store then we'll see it catch on
even more, I keep hearing negative comments about it based on
the crappy trailers shown on units at Apple retail locations, they
should download one of the higher quality iTunes encodes (like
Heroes or Battlestar) to show the system off.

[Stan Timek]

Media Center for the Masses

DaiMac,

You're right about the Apple Stores not showing the best demo videos - they do have HD material available but I imagine that it has to do with copyrights and clearances. Everything they're showing on the iTunes store has been cleared for public exposition.

When it comes to HD material in the store I'm sure it'll get there - it's just a matter of time before Apple negotiates those contracts and makes Hollywood feel safe with Apple's DRM solution.

Personally I'm hoping to get the indie players on board with my little project (that's taken far to long to get up and running) to get more HD stuff for everyone to enjoy.


Stan Timek

www.pollywogtheater.com
www.HD4AppleTV.com

[deblink]

FROM whence?

Whence means: from what place or source. From whence is
therefore a pleonasm. Nice article though.

[jeroethel]

great new word

right on re: whence. Thanks for teaching me "pleonasm". Always good to learn new stuff on Saturday.

[spacydog]

Apple TV != TV watching

Anything with "TV" in it should imply the ability to watch TV, i.e., I should be able to watch my local NBC's over-the-air feed of Scrubs or E.R. This product should have really been called "Apple we-stream-media-from-the-internet-to-your-TV". If that's the case, I'd rather watch that media on my computer's LCD. Glorified Youtube grainy video on my nice 50" plasma doesn't sound so appealing.