Apple Watch Production Cost

A research firm estimates show the cost of production of the Apple Watch Sport would be to only 24% of its selling price. The smartwatch would have a ratio “cost of production / sale price” better than iPhone.

Almost not found on the market, the smart watch of Apple is trying to shake up the market of the connected, and watch despite its high price. Apple Watch has indeed a rate of departure of 399 euros, which is located above that of its competitors, including the price usually varies between 150 and 350 euros, says WHOLESALEABLY.

And the price of this Apple Watch indeed proves that Apple is the best-performing high-tech brand in terms of profitability. Indeed, according to estimates of IHS Technology, the production cost of the cheapest Apple Watch Sport model of the range, would amount to only 24% of its selling price. The firm has thus estimated at 83,70 dollars the cost of production of this watch whose selling price is $ 349 in the United States.

A ratio “cost of production / sale price” better than iPhone

With 24%, Apple succeeds so to beat the ratio “production cost / selling price ” iPhone 6 running for around 35%.” The Apple Watch ratio is lower than that of the iPhone 6 Plus and other new Apple products and could be source of significant profits if sales match the interest generated by the Apple Watch .».

In his study, IHS Technology details even what he did to achieve this result. The firm estimated the screen of the Apple Watch at 20.50 dollars, the processor of the watch at 10.50 dollars, memory to 7.20 dollars and battery to only 80 cents. Add to that the cost of other components and labor costs and you get the total cost of production: 83,70 dollars. Of course, other elements are then added as fixed production costs and expenditures in research and development. Apple also spends a lot in communication to make known its connected watch.

But if it comes to significantly increase production costs, Apple always has a very comfortable margin. The Cupertino company should therefore continue to break records of profits in the second half thanks to its smart watch…

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