While Apple typically enjoys healthy margins across its entire product line, the recently released HomePod isn’t exactly positioned as a huge profit-maker for the Cupertino-based company. According to a recent teardown analysis conducted by TechInsights and provided to Bloomberg, Apple’s new smart speaker costs approximately $216 to make. With a base price of $349, some quick math reveals that the profit margin on the HomePod is probably in the range of 38%.
As to the cost breakdown, TechInsights found that the HomePod’s internal speaker components — which includes the microphones and tweeters — add up to about $58. Meanwhile, the A8 chip that powers the device is said to cost $25.50. As for other parts, TechInsights estimates that manufacturing and packaging costs add up to about $17.50 while the lighting system for the display and other internal components cost approximately $60.
What’s particularly interesting is that the margins Apple sees from each HomePod is actually smaller than what companies like Google and Amazon see from the sale of their own line of smart speakers. Specifically, the profit margin on Google Home and Amazon Echo checks in at about 66% and 56%, respectively.
Of course, it’s not exactly a dead-on comparison. While devices like the Echo offer up an expansive array of smart features and shoddy sound, Apple with the HomePod chose to emphasize a premium acoustic experience. And true to form, early reviews of the HomePod — from both everyday users and audiophiles — all seem to suggest that the HomePod offers up a best in class listening experience at its price point.
Speaking to this, the following HomePod review from the Audiophile subreddit is especially illuminating.
One final point worth noting: if you happen to be in the market for a HomePod, please be aware that the speaker can leave white marks on wood furniture. While this isn’t unique to the HomePod — Sonos One speakers do the same thing — it’s something to keep in mind.