Apple Inc (AAPL)

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08:16 AAPL Apple: Analyzing and pricing out the components of co's new "Apple TV" reveal uncharacteristically slim profits - Businessweek.com (122.67 )

Businessweek.com reports that by typical AAPL standards, the new set-top video box may as well be a hobby given how unprofitable it is in its current form. That's one conclusion you can draw from research firm iSuppli's analysis of the innards of the device, which connects a TV to videos stored on a Mac or Windows computer.

Having taken it apart, iSuppli estimates that the components and materials used to make Apple TV cost $237. Since AAPL sells it for $299, that would leave a gross profit of $62, or about 20%, before marketing costs. That would be a big change from AAPL's penchant for gross margins in excess of 50% outside its computer lineup.

Analyst Wendy Abramowitz, who covers AAPL for Argus Research, says that a lower gross margin on Apple TV probably won't have much effect on AAPL's financial picture. "I wouldn't even look for this product to be a substantial part of the revenue base initially," she says. Yet Abramowitz also points out that AAPL has warned analysts that overall gross margins will drop somewhat in coming quarters, in part because of new products.