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Apple (AAPL) Does Not Make Much On TV, But Intel (INTC) Does

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By Douglas A. McIntyre Published

Barron’s reports that the costs of the components in the AppleTV product are so high that the consumer electronics company does not make much. The product sells for $299. The cost of components is $237 according to iSuppy. So, best case, Apple (AAPL) makes 20%. But "that number does not include additional costs like cables, packaging and marketing."

Intel (INTC) gets about $68 for its part of the box, which is mostly the cost of its processor. So, the chip company does better than Apple does.

Why Apple launched the TV product is anyone’s question. It competes with set-top boxes, Tivos, DVRs, and Amazon’s Ubox, and that is just a partial list.

Apple already has its hands full, one would think, with getting its iPhone to market. The fate of the company’s shareholders depends on the new handset much more than it does the TV hardware.

The AppleTV. Why did the company bother?

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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