SAN FRANCISCO—Apple Inc.'s second-generation Apple TV—a dramatic departure from the first-generation product—features nearly the same internal design and key components as the company's iPad and iPod Touch products, according to a teardown analysis performed by market research firm iSuppli Corp.
"The first Apple TV was built like a net top computer. The architecture was basically a stripped down, small-form-factor desktop PC," said Andrew Rassweiler, director, principal analyst and teardown services manager for iSuppli (El Segundo, Calif.). "The second generation Apple TV is more like an iPad or iPod Touch with no display. The Apple TV’s A4 processor core, Wi-Fi/Bluetooth chip and power management chip are the same building blocks used in the, iPad, iPhone 4 and iPod Touch."
Rassweiler described the commonality of elements and features among the Apple TV, iPad, iPhone 4 and iPod touch as "striking."
The new Apple TV carries a bill of materials (BOM) of 61.98, including additional items boxed with the product, based on a preliminary estimate from iSuppli (El Segundo, Calif.). When the manufacturing costs are added in, the second-generation Apple TV’s production cost rises to $63.95, the firm said. The product is sold directly by Apple for $99.
The second-generation Apple TV's price of about 35 percent above the BOM stands in stark contrast to the first generation of the product, which appeared to be a near give-away or subsidized product for Apple, sold at prices that weren’t much more than the underlying hardware costs, iSuppli said.
Even with the margin improvement, the second-generation Apple TV is at the bottom end of the hardware margin spectrum for Apple products, iSuppli said. The most recent generation of iPod nano is at the opposite end of the margin range, and is one of Apple’s most profitable hardware items, in percentage terms, according to iSuppli.
ISuppli's teardown found that, like so many other recent Apple products, South Korea's Samsung Electronics Co. Ltd. is the marquee component supplier for the Apple TV. Samsung manufactures the Apple-labeled A4 applications processor in the Apple TV, along with the product's mobile DDR SDRAM, according to iSuppli. These components dominate the applications processor subsystem, which is the most expensive section of the Apple TV, with at a cost of $16.55—or 26.7 percent of the product’s BOM, iSuppli said.
ISuppli's Apple TV teardown also found Panasonic Corp. and Broadcom Corp. inside the product's Wi-Fi/Bluetooth module. In the power supply module, the teardown revealed Analogix Semiconductor Inc.’s ANX9836 HDMI transmitter and Digital Audio Interface device as well as components from Dialog Semiconductor plc, Texas Instruments Inc., Delta Electronics and SMSC Corp., the firm said.
Inside the Apple TV's memory section, iSuppli found 8Gbytes of multi-level cell NAND flash. In the specific Apple TV torn down by iSuppli, Toshiba Corp. was the supplier of this memory, although Apple always employs qualified alternative sources for such commodity parts, according to iSuppli.
There is also an empty slot on the Apple TV’s printed circuit board that suggests Apple can at least double the NAND flash capacity if desired, iSuppli said. Apple appears to have forgone this option in order to maintain the $99 key price point, according to the firm.
Other component suppliers in the Apple TV include Dialog Semiconductor plc in the power management subsystem, Texas Instruments Inc. with a 16-bit microcontroller, Delta Electronics with an Ethernet filter and SMSC with an Ethernet transceiver.
Apple is smart in standardize the system architect so that they can develop whatever product with the same hardware platform. Back to basic, Apple is also a strong man in software so it is not hard to understand that they have such strong will.
Does this surprise anyone? The good news is that we can look forward to the App Store for the AppleTV. Can the AppleTV move into the gaming market similar to how the iPhone moved into the handheld games market? $99 for a movie/game system is pretty good.
Apple TV has reused iPad hardware and has kept the cost low. However, one of important missing part in Apple TV is lack of innovation or new ideas. There many novel avenues Apple could have introduced with second generation of Apple TV. I hope some competitor will find out and exploit novel ideas to forge ahead of Apple TV.
What's the point of AppleTV? We already have CableTV, Internet, iPod, Playstation, and 3G Cell Phone with streaming media.
It's enough already. There's too many distractions for kids in this setup. Humbug!
This has absolutely no appeal to the masses because it's "not cool." There's nothing interesting in the Apple TV. They should have something that is essentially a low cost mac mini that has a wireless keyboard. In fact, perhaps I should get a mac mini instead... Oh, that's right. Already have one...
Agreed. Even being built from the same parts & platform as the iPad, and even with the potential to run iPad apps, the fact is, Apple TV isn't cool and most consumers will say it isn't something they feel like they need...or even want.
Hmmm... For a uncool product, it seems to be selling pretty well, maybe a million in the first quarter? (http://www.dealerscope.com/article/apples-newest-apple-tv-buoyed-price-cut-99-selling-well/1)
I think people are underestimating this box. When it gets the AppStore, I think you have a pretty nice little box for $99.
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