Apple (AAPL) is generating much smaller margins on its AppleTV set-top box than it does on iPod music players, according to a new analysis by the market research firm iSuppli.

According to an iSuppli teardown analysis, the bill of materials for the box costs Apple about $237. The box sells for $299 at retail. That’s a gross margin of 20.7% - but since that number does not include additional costs like cables, packaging and marketing, the real profits are smaller still.

Intel (INTC) has by far the largest share of the bill of materials, with $68 worth of parts, or about 29% of the total. The processor in the box makes up most of that: iSuppli says the AppleTV uses a custom Pentium M 1 GHz chip produced using 90nm process technology, which sells for about $40. As iSuppli notes, that is pretty old technology. “The use of the old and slow Intel microprocessor is a major factor in keeping down the BOM cost of the Apple TV,” iSuppli analyst Andrew Rasweiler said in a statement.

The box also uses an Nvidia (NVDA) GeForce Go 7300 graphic processor, a part iSuppli says sells for about $15, a Fujitsu 40GB hard drive, which runs $37, and a Broadcom (BRCM) WiFi board which costs $19. The rest of the parts “are unremarkable and common to conventional PC designs,” according to iSuppli.

Other parts in the box:

• Samsung 256MB GDDR3 SDRAM, $7.60.
• Nanya 512MB DDR2 SDRAM, $8.50.
• Silicon Image (SIMG) HDMI transmitter, $1.50.
• Intersil (ISIL) controller, $1.10.
• Realtek ethernet controller; $1.
• SST microcontroller, $1.
• Cypress (CY) USB peripheral controller, 85 cents.
• Cypress clock generator, 80 cents.
• Realtek HD audio codec, 75 cents.
• Other assorted components, $32.00
• Delta 36 watt power supply, $7.25.
• Mechanical components, $12.60.
• Wire harnesses, cooling fans, etc., $4.25.
• Packaging and accessories, $8.80.
• Manufacturing, $10.

The research firm forecasts that Apple will sell 1 million AppleTV units this year, and 1.4 million next year.

Apple today is up $1.15 at $123.82.