Apple’s HomePod is priced at $350, which when considering that there are plenty of smart speakers in the market today, is rather pricey. However that price might be justifiable when you consider that a recent teardown by TechInsights has revealed that the HomePod could cost around $216 to make.

Speaking to Bloomberg, Al Cowsky, TechInsight’s costing manager was quoted as saying, “Apple is compressing their margins a bit, wanting to go big or go home. In doing so, I suspect they reduced the selling price from a normal Apple margin in order to sell more units on volume.”

Based on their calculations, this means that Apple is pocketing around 38% per HomePod sold. This is versus other Apple products which typically yields a higher margin, such as the iPhone X which has a margin of 64%. That being said, whether or not this is the actual cost remains to be seen.

This is because the prices sourced by TechInsight might not necessarily be the actual prices Apple pays. Apple could be getting a discount due to the volume that they order, or because of a good relationship with a particular supplier. There are also other costs that need to be factored in, such as the cost of R&D, marketing, and so on, but it’s an interesting insight for those who are curious.

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