AppleInsider reports that according to research from TechInsights, Apple’s HomePod costs around $216 to build. With HomePod costing $349, this translates to margins of around 38%, which is lower than Apple’s margins for iPhone and iPad, and also lower than HomePod’s rivals such as Amazon’s Echo and Google’s Home, with margins of 56% and 66% respectively.
TechInsights’ HomePod component breakdown shows that the microphones, tweeters, woofer and power management hardware cost $58 to build, with other parts such as the OLED panel costing $60. According to TechInsight, the A8 chip costs $25.50 to make, and the casing and various other components cost $25. Manufacturing, testing, and packaging together cost a further $17.50.
“Apple is compressing their margins a bit, wanting to go big or go home,” said Al Cowsky, TechInsight manager. “In doing so, I suspect they reduce the selling price from a normal Apple margin in order to sell more units on volume.”
Source: Estimates peg HomePod build cost at $216, Apple's margin smaller than competitors