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Apple TV take 2: 100 hd titles today

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    #106
    Re: Apple TV take 2: 100 hd titles today

    Guys,

    I work in sales in the electronic component industry.

    First of all, those "iSupply" cost estimates are just that - ESTIMATES. Much of the costs are based on list prices or publicly attainable prices. Major customers like Apple buying components in the millions have prices that are not published but rather negotiated on a customer by customer basis. All of that sort of discussion is highly confidential and major manufacturers like Apple or Motorola or Lucent guard their prices aggressively. I deal every day with one of those 3 companies and no one outside the agreed on parties know the pricing.

    I can guarantee you that Apple is not losing money on the AppleTV. I doubt the cost is $237. Maybe Apple is not making much money here (do they need to?) but costs of 40 Gig mobile drives have come down a lot in the last year for one. Other costs have risen but yet on the average, the costs came down. I can guarantee you that they probably got some cost concessions from their suppliers in order to lower the price. I don't think Apple makes a lot from movie/music sales so losing money on a piece of hardware doesn't make a lot of sense.

    Comment

      #107
      Re: Apple TV take 2: 100 hd titles today

      Originally posted by RonV View Post
      Apple could be trying the Razor Blade or Printer Ink cartridge pricing model. Sell the hardware at cost and make it up in supplies. In their case the actual content. I can't even guess what Apple's share of a 2.99 rental is.
      I'm not sure what Apple profits are on rentals, but I do know that with places like Blockbuster that the video store pays the studio a one-time fee of $2-$4 per video and then pays 40% of rental revenues. If we assume that they use the same model for the online business, we could assume that Apple makes about $1.79 per movie rental.

      Comment

        #108
        Re: Apple TV take 2: 100 hd titles today

        Originally posted by NA9D View Post
        First of all, those "iSupply" cost estimates are just that - ESTIMATES. Much of the costs are based on list prices or publicly attainable prices. Major customers like Apple buying components in the millions have prices that are not published but rather negotiated on a customer by customer basis.
        Sure it is an estimate, but that estimate DID INCLUDE probable volume discounts Apple would receive, but then again those estimates do not include shipping costs, marketing, research, support, further development, list goes on. So it was generous if you ask me. Lets not also forget that even a 20% margin in manufacturing is basically breaking even.

        In previous analyses, iSuppli found that Apple's manufacturing and hardware costs amounted to between 60 percent and 70 percent of the retail price. The remaining 30 percent to 40 percent of the price is generally attributed to factors like software, intellectual property and licensing, not to mention profit.

        Comment

          #109
          Re: Apple TV take 2: 100 hd titles today

          Some little facts now coming to light on iTunes rentals and the updates:

          1.) HD content is RENTAL ONLY and only available from the AppleTV.
          2.) Rented movies can only be played on current generation iPods (5th Gen iPods don't make the cut - I am downloading a rental now and will verify this).

          There are movies purchasable on Vudu that are rent only on iTunes...

          Comment

            #110
            Re: Apple TV take 2: 100 hd titles today

            actually - losing money, or making only the slimmest of margins on a single piece of HW makes a lot of sense if you are, at the same, building brand loyalty to a broader services while (at the same) introducing your newly found user to higher profit devices and services.

            ATV + iPhone + iPod + MacBook + Apple Device XYZ all served by iTunes - it's like an avalanche that just keeps building an ecosystem for revenue and profit....very compelling.

            Doing this also drastically lowers user acquisition costs and churn for each service addition...not just an Apple phenomenon. Comcast is now the 4th largest telco in the US (I believe) why? Two words - "Triple Play." It is also experiencing the lowest churn in years...how much easier is it to retain a customer and attract new ones when your users are already hooked on one or more services/bundles....

            To be clear, I'm no Apple zealot, but I inadvertently became a prototype customer - started with Nano>bought my wife a MacBook>added another iPod x2> Got an iPhone because it works well with the aforementioned>ended up picking an AV receiver based (in part) on it's iPod options>optioned my car with an iPod jack>>>>and so on....they just made it so easy..no particular loyalty on part just easy integration & convenience...

            Comment

              #111
              Re: Apple TV take 2: 100 hd titles today

              Originally posted by NA9D View Post
              2.) Rented movies can only be played on current generation iPods (5th Gen iPods don't make the cut - I am downloading a rental now and will verify this).
              I can confirm this. I have a 5.5 Gen iPod. It doesn't support the rentals.

              Comment

                #112
                Re: Apple TV take 2: 100 hd titles today

                ...you'll have to buy a new iPod/phone - that $1 in in rental profit just turned into $34-100...and refreshed your "loyalty" to Apple!!

                Comment

                  #113
                  Re: Apple TV take 2: 100 hd titles today

                  Originally posted by Limey View Post
                  ...you'll have to buy a new iPod/phone - that $1 in in rental profit just turned into $34-100...and refreshed your "loyalty" to Apple!!
                  Ah, but not quite yet for the iPhone. I'm waiting until a SlingPlayer client is released.

                  What really torques me though is that I have a Phillips portable DVD player/iPod dock that is really slick. Problem is Apple changed the dock port in the new generation classics. So, if I bought a new iPod, I still wouldn't be able to use my nice portable 8" viewer with it!

                  This is truly one of the most irritating things about Apple.

                  Comment

                    #114
                    Re: Apple TV take 2: 100 hd titles today

                    Originally posted by Limey View Post
                    ... Comcast is now the 4th largest telco in the US (I believe) why? Two words - "Triple Play." It is also experiencing the lowest churn in years...how much easier is it to retain a customer and attract new ones when your users are already hooked on one or more services/bundles....

                    ...
                    But Comcast doesn't have Quadruple play like Verizon has so you can get a discount on your cellphone service.
                    I really hope I can get my VUDU soon. I see more on Ebay so maybe I'll get lucky with one of the auctions or VUDU will have a really good sale. The Apple TV does me no good since I have an Xbox 360 which already gives me 720P downloads. I want 1080P24 content. I already have over 500 titles between HD DVD and BD. I don't plan on buying as many titles this year(60 instead of 300+) and the VUDU rentals will really fill the gap.

                    Comment

                      #115
                      Re: Apple TV take 2: 100 hd titles today

                      Originally posted by aaronwt View Post
                      But Comcast doesn't have Quadruple play like Verizon has so you can get a discount on your cellphone service.
                      I really hope I can get my VUDU soon. I see more on Ebay so maybe I'll get lucky with one of the auctions or VUDU will have a really good sale. The Apple TV does me no good since I have an Xbox 360 which already gives me 720P downloads. I want 1080P24 content. I already have over 500 titles between HD DVD and BD. I don't plan on buying as many titles this year(60 instead of 300+) and the VUDU rentals will really fill the gap.
                      I'm sorry if I'm incredulous and please don't take this the wrong way.

                      - You have money to buy an 1080p/24 TV
                      - You have money to buy a Blu-Ray player
                      - You have money to buy an Xbox (assume you use this for HD-DVD)
                      - You have money to purchase 500 HD and BR movies
                      - You don't have $399 to purchase a Vudu.

                      Do I have that correct?

                      I'm sorry if I am not sympathetic...

                      Comment

                        #116
                        Re: Apple TV take 2: 100 hd titles today

                        Originally posted by NA9D View Post
                        I'm sorry if I'm incredulous and please don't take this the wrong way.

                        - You have money to buy an 1080p/24 TV
                        - You have money to buy a Blu-Ray player
                        - You have money to buy an Xbox (assume you use this for HD-DVD)
                        - You have money to purchase 500 HD and BR movies
                        - You don't have $399 to purchase a Vudu.

                        Do I have that correct?

                        I'm sorry if I am not sympathetic...
                        Well I actually have four HD DVD players. But realistically I've spent way too much on HD media since April 2006 and I really need to slow down. Although I did the same thing between 1998 and 2000 with DVDs.
                        This year I plan on doing more rentals and the VUDU will go a longs ways to help me accomplish that. The VUDU looks good to me because I never know what I will be in the mood to watch and it will give me instant access. That is why I have so many HD DVD/BDs.
                        I have the money to buy the VUDU at $400 I just don't perceive that as a good value right now. If it was 2001 when I first started watching HD or even 2 years ago I would have jumped on it without hesitation at that price(probably a much higher price back then) since there wasn't as much HD content. But now I have many avenues(Xbox Live, FIOS, HD DVD, and BD) that supply HD content so it doesn't make the VUDU purchase as high a priority at $400. At half that price with movie credits and it jumps to the top of my list.
                        I'm going to purchase a VUDU, it's just a matter of when. Ideally before the end of the January, but worst case before the end of Winter.

                        Comment

                          #117
                          Re: Apple TV take 2: 100 hd titles today

                          Originally posted by aaronwt View Post
                          I have the money to buy the VUDU at $400 I just don't perceive that as a good value right now.
                          Fair answer. We all place different values on different things.

                          I think you'll like it once you get it and you'll wonder why you waited...

                          This iTunes rental thing is becoming more of a headache...

                          - Rent on AppleTV and you can't move it elsewhere
                          - I'm not sure if you can move rentals between authorized iTunes computers

                          Comment

                            #118
                            Re: Apple TV take 2: 100 hd titles today

                            I bought an Appple TV today out of curiosity to compare with my Vudu.

                            So far as I can tell it's still vapor-ware.

                            No new software, no movie rentals, no nothing.

                            I don't have iTunes (nor want it)

                            So for now, I'm sticking with my Vudu.

                            I also have Directv and can download movies to my Dvr. It works fine too, but so far they only have 3 HD movies with DD5.1. All the rest are in SD/Stereo format.

                            Comment

                              #119
                              Re: Apple TV take 2: 100 hd titles today

                              Originally posted by RobertHodge View Post
                              I bought an Appple TV today out of curiosity to compare with my Vudu.

                              So far as I can tell it's still vapor-ware.

                              No new software, no movie rentals, no nothing.
                              I think I read on the Apple forum that the firmware update for the ATV unit wont be released for like 2 weeks. So for now your stuck with how it works.

                              Comment

                                #120
                                Re: Apple TV take 2: 100 hd titles today

                                Yes - it will be 2 weeks before the ATV update comes out.

                                Comment

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