The Apple TV sells at our local London Drugs for $350 (Canadian dollars). Curiously, I can't find it at competitor Future Shop, whose tag line was at one time "What the Future has in Store for You."
Anyhow, $350 for a computer disguised as a media player is cheap! I realized that after shopping for a PC in the same form factor. That's right, you can buy Windows-running PCs that look almost identical. I spied one in a locally-owned PC shop, and asked the price: $500.
A bit of premium, I thought, but alright. I wanted a small computer to replace the old klunker my wife currently uses.
What are the specs, I asked. Didn't have any, really, because the tiny box with its rounded corners still needed a hard drive, CPU, and RAM. "Takes any components that fit notebook computers," I was reassured. Total expected cost? $1000 even. Yikes!
Like I said, that Apple TV is pretty cheap.
PS: I've since found that HP sells a "slimline" computer that costs around $650 at Staples. That might be the solution.
Having taken it apart, iSuppli estimates that the components and materials used to make Apple TV cost $237. Since Apple sells it for [US]$299, that would leave a gross profit of $62, or about 20%, before marketing costs.
So that mini PC is r-e-a-l-l-y overpriced!