A new teardown from IHS Technology estimates that it only costs Apple $83.70 to build a complete 38mm Apple Watch Sport.
That’s less than 24 percent of the device’s $349 retail price, which is interesting for Apple:
“It is fairly typical for a first-generation product rollout to have a higher retail price versus hardware cost,” said Kevin Keller, senior principal analyst-materials and cost benchmarking services for IHS Technology. “While retail prices always tend to decrease over time, the ratio for the Apple Watch is lower than what we saw for the iPhone 6 Plus and other new Apple products, and could be of great benefit to Apple’s bottom line if sales match the interest the Apple Watch has generated.”
The most expensive part, according to the firm, is the display and touchscreen – which is $20.50.
But these cost estimates should be taken with a large grain of salt. During Monday’s quarterly earnings conference call, Apple CEO Tim Cook took time to pan the estimates saying he has “never seen one that’s even close to accurate.”
And the estimate totally leaves out other costs like research and development and software, among others. Even so, the breakdown is an interesting look at how Apple continues to leverage its massive supply chain to rake huge amounts of revenue.
Apple Watch preorders began to arrive to buyers starting late last week. Buy any current order placed today from Apple’s site is scheduled to ship sometime in June.
Prices range all the way to $17,000 for the most expensive 18-karat gold Apple Watch Edition.
A mid-range Apple Watch collection, with a sapphire display cover and stainless steel exterior, ranges from $549 to $1,099. Apple also offers a number of other additional bands for the watch.
You’ll need an iPhone 5 or later to interact with the device.
For other recent Apple Watch news, see: Apple Watch delays are caused by faulty haptic motors but no defective units shipped, A day in the life: Ask us anything about Apple Watch, and You can soon order Apple products from your wrist.