With Apple’s shiny new toy finally available to the masses, we are fully aware what those masses will have to shell out to own one. With a low end starting price of $349 and high end exceeding $10K the Apple Watch is not going to be a cheap purchase for anyone. Apple is billing their latest tech product as tech/fashion in order to try and wrap the fashion industry into its marketing strategy. There’s no doubt that the Apple Watch is likely to be the best selling smartwatch yet, and that will be thanks in part to hardcore Apple fanatics.
With the retail pricing already well known, what about the cost to Apple to make the watch? Research firm IHS has down a tear down cost analysis of the device and has determined Apple pays less than $84 to make their brand new toy. Of course that’s before marketing and advertising costs are added in but even then, that’s a pretty healthy markup.
The Apple Watch Sport 38 mm costs $349 and the teardown shows a bill of materials of $81.20 with the cost of production rising to $83.70 when $2.50 in manufacturing expense is added, IHS said.
Apple is well known for making a high gross profit on their products and it looks like the Apple Watch is making them more than a pretty penny. At a cost of $84 the $349 watch is pulling in over $265 profit per unit sold, that’s a healthy return if I say so myself. Even if you factor in $65 per watch for marketing and advertising that’s still $200 in profit per unit. I’d say this would be an investment the Sharks on Shark Tank would sink their teeth into. What do you think? Let us know in the comments below or on Google+, Facebook and Twitter.
Last Updated on November 27, 2018.