Ca-ching, ca-ching, ca-ching! That’s the sound of massive profits coming Apple’s way with every Apple Watch it sells. MacRumors points us to some new estimates from IHS iSuppli that show the Apple Watch Sport costs roughly $83.70 to make, or roughly 24% of its suggested retail price of $349.
“It is fairly typical for a first-generation product rollout to have a higher retail price versus hardware cost,” explains IHS Technology analyst Kevin Keller. “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.”
What’s particularly astonishing about this is that Apple will assuredly fetch even higher margins on the stainless steel Apple Watch and especially on the gold Apple Watch Edition. While gold is more expensive than steel to use for manufacturing, the internal components are identical between the high-end model and the lower-end models. Basically, every time Apple sells a $10,000 Apple Watch, it’s selling a device that’s almost pure profit.
For a more detailed breakdown of what the Apple Watch costs to make, be sure to check out MacRumors‘ post here.