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Technology Stocks : Tivo (TIVO) Interactive TV -- Ignore unavailable to you. Want to Upgrade?

To: Andre Williamson who wrote (1706)	6/27/2005 3:04:25 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 2093

Tivo has listed equipment costs (COGS, although i think they have another name for it) in their SEC filings, although i don't know if they break down costs unit by unit. last time i checked the equipment prices were not inconsiderable--IIRC, i think they were selling the equipment for close to cost (on an aggregated basis) when the 40GB units were retailing for $100-150. compared to a DVD player, Tivo obviously has more moving parts (hard drive, etc.), not to mention Ethernet port. the equipment is imo a bargain for $100, not to mention for free. my guess is, Tivo is not making money if somebody takes a free unit and quits after 1yr contract. even with $300 equip lifetime, i don't think the amortized profit is that high. granted, one expects ASPs and GMs to contract as the market expands; i just don't know if they were planning to move this fast. also, it's kind of hard to lower your prices beyond "free". the only way to beat that is to start cutting down the monthly cost and/or lifetime cost.