Apple TV not a very profitable product for the company?

Apple TV not a very profitable product for the company?

Apple is primarily an hardware company. The company does sell music and make extraordinary software applications but they remains an hardware company.

The company is known for the high profit margins on their hardware products. The entire iPod range of digital media players is a good example.

However, if we were to look at the recently launched Apple TV device, market sources claim that the company is not really making a lot of money from it.

Research firm iSuppli has conducted their research on the Apple TV device and they have come to the conclusion that the device is costing the company around $237.

Apple sells the device at a price of $299 which means that they are generating a rather slim profit of $62, or about 20%, before marketing costs.

Andrew Rassweiler, analyst with iSuppli spoke about their research findings: “This is certainly a departure for Apple, or at least it’s approaching a departure. We made some very aggressive assumptions with this device, and by that I mean we assumed low prices on the components.”

Analyst Wendy Abramowitz added: “I wouldn’t even look for this product to be a substantial part of the revenue base initially.”