The guesstimates are in and it looks like Apple shells out $216 to build each HomePod unit, meaning margins from the tech giant’s first smart speaker are much slimmer than those of its flagship iPhone line.
If the estimate is correct, this means Apple generates a profit margin around 38 percent with each $349 HomePod sold. This stands as lower than competing smart speakers like Amazon Echo and Google Home, which boast margins of 56 percent and 66 percent, respectively.
The component breakdown found that the HomePod’s microphones, tweeters, single woofer and power management hardware add up to $58, while other miscellaneous parts like the OLED panel come out to another $60, the report said. TechInsights pegs Apple’s A8 chip at $25.50, as the housing and other unmentioned components run another $25. Manufacturing, testing and packaging tack on $17.50 to the final cost according to the firm’s estimates.
“Apple is compressing their margins a bit, wanting to go big or go home,” said TechInsight 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 has typically netted huge margins with its iPhone lineup, leveraging its supply chain sway and impressive market share of the memory market to drive down component and assembly pricing.
Where a 64GB iPhone X might run $357.90 to make, Apple runs a 64 percent margin of the $999 handset. The mid-tier iPhone 8 reaps a lower margin of 59 percent, the firm said.
Granted, this is all speculation, as Apple has never released official numbers as the the manufacturing costs of its product line.
Via AppleInsider, Bloomberg, and TechInsights