The stock of Apple Inc (NASDAQ:AAPL) closed at $172.99 gaining 3.36% in yesterday’s trading session. The building of Apple’s HomePod Speaker has cost the company $216 and sources indicate that it generates thinner profit margins when brought into close relation to other high end products such as the iPhone and the Apple Watch.
At this point in time it is being sold out at $349 and considering the $216 channeled to its production it then implies that the business guru has been generating margins of about 38 percent as was disclosed by the product analysis firm.
The Alphabet Inc (NASDAQ:GOOGL)’s Google Home is associated with a margin of 66 percent whereas Amazon.com, Inc (NASDAQ:AMZN) Echo is associated with a margin of 56 percent.
By comparing those figures one can make his/her conclusion about Apple’s HomePod Speaker. It is worth noting that the above mentioned products are the ones at the frontline when it gets to competing in the smart-speaker market. However, it is critical to point out that they offer lower audio quality as it is clearly brought out by the firm’s estimates.
TechInsight’s costing manager Al Cowsky while addressing a number of journalists after attending a conference outlined that Apple was compressing its margins and that spelt out that it could either go home or go big. He went further to state that they might have resorted to slashing the selling price from a normal Apple margin in a bid to ensure they sold out more units on volume.
According to a materials teardown by IHS Markit, comparisons were drawn and it was easy to see that the California-based Company when it got to its flagship iPhone X generated margins of 64 percent.
An analyst opined, “Apple’s latest hardware product has won praise for its sound quality but criticism for the lack of smooth integration with the Siri digital voice assistant and the inability to work tightly with some popular outside applications, unlike its rivals. Apple, like Amazon.com Inc. and Alphabet Inc.’s Google, wants the HomePod to keep consumers glued to its system of services like its music subscription.”