Mark Gurman, Bloomberg:

Apple Inc.’s HomePod, the company’s first foray into speakers in a decade, costs $216 to build and generates thinner profit margins than other products like the Apple Watch and iPhone, according to analysis by TechInsights.

Given the HomePod’s $349 price, that $216 cost suggests Apple is generating margins of about 38 percent, according to the product analysis firm. That compares with margins of 66 percent and 56 percent for the Google Home and Amazon Echo, products that compete in the smart-speaker market, but offer lower audio quality, according to the firm’s estimates.

Margin is complicated. Lots of analysis goes into setting prices and, thus, determining margin. But it does seem reasonable to assume this is Apple entering a somewhat crowded market, wanting to keep their pricing relatively low (compared to their cost) to help raise demand.

The bulk of the HomePod’s costs come from the internal speaker technology, including the many microphones, tweeters, the woofer and the power management components. That adds up to $58, while an additional $60 includes various smaller parts like the lighting system used to display the Siri animation on the top of the device.

The HomePod’s A8 chip is estimated to cost $25.50, while the external housing and other items come in at $25. TechInsights also estimates manufacturing, testing, and packaging to add up to $17.50.

There’s clearly a lot more going on under the hood in a HomePod than in the much cheaper Google Home or Amazon Echo. If you haven’t already, I would definitely click over to the iFixit HomePod teardown and watch the video. I found it fascinating.