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Tuesday, October 05, 2010, 12:55 pm PT (03:55 pm ET)

Costliest of Apple TV's $62 in components is $17 A4 processor

The new, low-priced Apple TV has an estimated component cost of $61.98, and manufacturing reportedly adds about two more dollars to the total expenses.

iSuppli on Tuesday published the results of its Apple TV teardown, which found a total preliminary estimated production cost of $63.95. That price includes the cost of additional item boxes with the product, the research firm said.

The most expensive component was estimated to be the custom-built A4 processor, which sports 256MB of RAM. The Samsung-manufactured chip has an estimated cost of $16.55.

The Toshiba-supplied 8GB of internal memory is the second costliest component of the set top box, with an estimated cost of $14. And the Wi-Fi module, which includes a deactivated Bluetooth chip, is another $7.65.

"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. "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."

Though the device sells for a low $99 price point, iSuppli's findings suggest that Apple has about a 35 percent margin on each device it sells. The company also highlighted the remote control included in the package as the "Cadillac of remotes."

"The Apple TV's remote control represents more incredible mechanical engineering from Apple," Rassweiler said. "The remote appears to machined from a solid piece of aluminum. Because of this, the electronics of the device must be slid in through small holes on the side, similar to putting a ship in a bottle. It’s a clever and a detail-oriented piece of design that makes the remote very pricey and very unique to Apple."

iSuppli


The remote and other items boxed with the new Apple TV are said to cost a total of $6.10, or 9.8 percent of the build of materials cost.

iSuppli also said that it believes about 6GB of the onboard storage is available for caching streaming media. The remaining 2GB is believed to be reserved for the operating system.