$349 Apple Watch Sport only takes $84 to make, according to IHS
The Apple Watch Sport 38 mm costs a total of $83.70 to make while its retail price is $349, according to estimated reports from IHS Technology.
Source: IHS
The technology research firm conduced a teardown of the watch. A preliminary estimate shows that actual hardware costs are only about 24 per cent of the manufacturer’s suggested retail price.
Other Apple products reviewed by IHS are in the 29-98 per cent range. IHS and its Teardown Mobile Handsets Intelligence Service said that the watch has the lowest hardware costs compared to retail price out of any product they have researched.
Kevin Keller, senior principal analyst-materials and cost benchmarking services for IHS Technology, said: “It is fairly typical for a first-generation product rollout to have a higher retail price versus hardware cost. 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.”
However, the report notes that the analysis of the watch does not include logistics, amortized capital expenses, overhead, selling, general and administrative expenses (SG&A), research and development (R&D), software, IP licensing and other variables throughout the supply chain such as the EMS provider.
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