APPLE’S AMAZON-RIVALLING HomePod speaker costs just $216 (3154) to make, a recent teardown of the device has revealed.
According to a report by Bloomberg which cites product analysis firm TechInsights, Apple is generating margins of over a third (38 per cent) on its latest speaker device, which retails for $349 in the US (£320 in the UK).
Interestingly, however, this margin is significantly lower than Apple’s competitors, such as the Google Home and Amazon Echo, which have margins of 66 percent and 56 percent, respectively.
“Apple is compressing their margins a bit, wanting to go big or go home,” said TechInsight’s costing manager, Al Cowsky. “In doing so, I suspect they reduced the selling price from a normal Apple margin in order to sell more units on volume.”
Apple isn’t so lenient with its margins as on its other products, however. The Cupertino firm reportedly generates margins of 64 percent on its flagship iPhone X device according to analyst house IHS Markit, and the original Apple Watch, which cost $349 at launch in 2015 was estimated by IHS to cost only $84 for the materials, a margin of over 75 per cent.
Perhaps this is something to do with Apple having less confidence in its latest speaker product?
For instance, the device has been plagued by bugs since launch. Just this week, Apple’s HomeKit platform left some HomePod buyers unable to set up the Siri-powered speaker.
Apple’s HomePod went on sale in the UK last week, but some users (the INQ included) were left unable to make it past the setup screen, which was repeatedly throwing up a ‘Set-up failed -6722’ error message on the iPhone. As a result, Apple’s customer support team was advising customers they should return the HomePod and get a refund.
It’s also been revealed that the Apple HomePod does not respect wood. µ
Source : Inquirer