The $99 Apple TV is Made of $64 Worth of Parts
Teardowns are a lot of fun for those of us who just love to stare at the resulting gadget porn. However, they're also pretty useful when it comes to putting a number on the cost of a device's parts.
iFixit usually has our back when it comes to pictures of gadgets in their birthday suits and instructions on how to tear things apart. However, iSupply uses its teardown for something else: estimating the total cost of manufacturing the device. On the chopping block is the new Apple TV, which the company has wasted no time in disassembling and pricing.
The market research team estimates the total cost of an Apple TV box to be $61.98, or $63.95 when additional manufacturing costs are added in. The most expensive part of the device is the A4 processor, which rings in at $16.55. In second is the 8GB of flash storage, which costs exactly $14, and in third place is the WiFi and Bluetooth module at $7.65.
Though the cost of manufacturing the original Apple TV is unknown, the cost of the second generation Apple TV is said to leave more room for profit. Andrew Rassweiler, an iSuppli analyst, told Business Week the cost of materials for the original device were closer to the retail price.
Read more on about the teardown on iSupply.
Source: iSupply via Business Week

Mass production discount ftw
Bingo. I've worked on projects that have maybe a few hundred dollars worth of parts. But when you add in how much labor I spent meshing them and programming them: that's where tons more cost went.
Even if the box cost 60 bux to make, that 39 bux profit is enough to cover all the shipping/rent/labor/R&D already.
anything AFTER is the money maker, cuz a lot of morons will just pay for their *cough*overpriced,outdated garbage shows*cough*. They think they're cool oooooMG its magical I can stream shows off the internet OH MY GOD !!!
how to create a job by Linda Mcmahon:
"An entrepreneur takes a risk and starts a business that creates a product or service that fills a need. Then sells that good or service for more than it takes to provide it."
But why the hell does Apple need to make it so expensive? I mean, granted this still doesn't take into account things like labor costs and shipping... but even if they were, I doubt it would be $100. More like $80.
To be honest (and to my dismay), no device like this is really in position to boost this area of entertainment. Therefore, there is practically no competition for this, and Apple could place itself as a front runner when this type of device takes off. So why not attract more people by selling the device at no profit and just rely on iTunes rentals and whatnot to generate revenue?
That way when this type of device takes off in the market, Apple will already have a huge foothold.
BUT, then again, I'm no business analysis, so maybe they see something I don't.
Parts and assembly are only a small portion as everyone knows.
R&D, distribution and advertising are also massive costs. Its kinda why a 20c hands free kit costs $20 in the shops. I wouldn't be surprised if Apple is losing money on these.