Paul Morris on February 3, 2019, 9:55 am

Apple Sells Apple TV At Cost, HomePod At Loss, According To John Gruber

John Gruber of Daring Fireball fame has made some astonishing claims on an episode of The Talk Show. The well-placed tech writer and Apple commentator has suggested that Apple sells its 4K Apple TV at cost and that the company actually makes a loss on each HomePod speaker it sells.

Yes, you read that right, according to John Gruber, Cupertino-based Apple Inc. goes to market with the 4K Apple TV priced at $180.00, which he believes is the exact same amount that the company pays to manufacturer each unit.

Gruber says this information comes from a “reliable little birdie” and confirms that he has also heard similar information pertaining to the company’s intelligent Siri-based speaker, the HomePod.

Where that product is concerned, the information given suggests that Apple actually makes a very small loss on each unit sold:

One thing I’ve heard from reliable little birdie is Apple effectively sells [the Apple TV] at cost. Like they really are like a $180 box. And you think wow this is amazing, it has an A10 processor which we know is super fast, it has crazy good graphics.

I’ve heard the same thing about HomePod too. Why is HomePod so much more expensive than these other speakers you can talk to? HomePod I actually have reason to believe, Apple actually sells it at a loss. I can’t prove it. I don’t think it’s a big loss.

When HomePod was initially released, a teardown and immediate estimates approximated the cost of its internal components to be at around the $216 mark. Apple sells the speaker for $349 but that teardown doesn’t take into consideration the actual full embodied cost of manufacturing, marketing, and doing all of the other parts that come with selling hardware. If the information is accurate, then it’s clear that Apple is simply trying to populate the market with its HomePod in order to get a market share as it attempts to drive internal costs down as the product matures.

Of course, all of this information is based on the say-so of a “little birdie.” A trusted little birdie but a little birdie nonetheless. Interestingly, Gruber doesn’t feel that Apple is selling products too high, he simply is of the belief that Apple is making and offering products which are too good. Now that is food for thought.

(Source: Overcast)