The majority of the component cost in the AppleTV is likely the storage so that's a big hit.

Having the ethernet port and Thread radio gated behind the 128gb model is obnoxious.

I have three Apple TVs that are ethernet connected and form the backbone of my home's Thread network, but they have <5 apps installed and would do fine with 32gb rather than 128gb. (And in fact, they are all currently 32gb models from the previous generation where those did include ethernet.)

at a (previously) $20 price difference, why would they add a 3rd model?

I don't know what makes sense for Apple's supply chain and BoM, I'm just saying that the price for my home's worth of Apple TVs with the minimum functionality I use has gone up by over 50% since the previous-gen model and now sits at over $1,000 in local pricing.

That's the kind of pricing that makes me start to consider the Google 4K Streamer even if it's a UX downgrade - for $300 I get ethernet and Thread on every TV.

That’s infuriating. I was hovering over the buy button last week, and now that’s a deal breaker. I was already going for the premium price point for hard-to-justify reasons.

Update: while I am terribly unhappy to give them money, there are still retailers who are listing the previous price and I was able to scoop one up before the hike went into effect.