Apple Watch U.S. Sales Estimated at 2.8 Million, Sports Band May Have Base Cost of Just $2

[MacRumors]

The latest data from Slice Intelligence, a digital commerce research firm that tracks email receipts, estimates Apple Watch sales at 2.79 million in the United States nearly two months after the wrist-worn device launched, according to Reuters. Slice Intelligence previously estimated 1 million Apple Watch pre-orders on April 10 and 2.5 million orders processed through late May.

The report claims that about 17 percent of those Apple Watch customers proceed to spend hundreds of dollars on extra bands for the smartwatch, enabling Apple to make a profitable double dip into customers' wallets. While the Sports Band starts at $49, for example, technology research firm IHS estimates the 38mm fluoroelastomer band costs Apple just $2.05 to make.

The estimate does not include the cost of packaging and shipping, and the bill of materials may in fact be slightly more expensive, but it remains clear that Apple has a significant profit margin on spare bands. Apple also sells the Classic Buckle, Milanese Loop and Leather Loop retail for $149, Modern Buckle for $249 and Link Bracelet for $449 through the Apple Online Store.

"It's just a psychological thing," said Carolina Milanesi, chief of research and head of U.S. business at Kantar Worldpanel ComTech, a consumer research firm. "I start with the least investment, and then I spend more money, but I get something else."

Apple Watch in-store reservations at Apple Stores began earlier this week ahead of the wrist-worn device's second wave launch in Italy, Mexico, Singapore, South Korea, Spain, Switzerland and Taiwan on June 26. A limited selection of Apple Watch models will be available at 10 Corso Como in Milan, BOONTHESHOP Cheongdam in Seoul and Malmaison by The Hour Glass in Singapore.

Article Link: Apple Watch U.S. Sales Estimated at 2.8 Million, Sports Band May Have Base Cost of Just $2

 

[macsrcool1234]

The price of bands is just robbery.

 

[wkadamsjr]

Apple also sells the Classic Buckle, Milanese Loop and Leather Loop retail for $149, Modern Buckle for $249 and Link Bracelet for $449 through the Apple Online Store.

Apple does not sell the Modern Buckle through the online store, seeing as that option has been "Currently Unavailable" for weeks. (A technicality, I know...)

 

[joshen]

I hope people don't use the 'R&D cost' card about a damn rubber band.

 

[Mercifull]

Another pointless bill of materials article. It's obvious that apple is making an absolute killing on the bands but the $2 figure is just ridiculous. It doesn't take into account other manufacturing costs such as tooling or machine design. It doesn't take into account any research and development costs, packaging, distribution, marketing and promotion etc. Apple are no doubt making a tidy profit off all the bands, not just the rubber ones but $2 is misleading and wrong.

 

[iBlazed]

Wish I could fail like that...

 

[KmanOz]

The price of bands is just robbery.

Don't buy a Breitling, Panerai, AP, etc etc. Good quality bands are expensive. The stainless band is a work of art.

 

[Galley]

The Sport band will show normal wear after just a few days of use, and as such cannot be refurbished. That may also be true for most of the other bands. That may be a factor in the retail price.
With that being said, if the Sport band were priced at $29 and made available in a wide range of colors, Apple would sell tens of millions.

 

[sracer]

Another pointless bill of materials article. It's obvious that apple is making an absolute killing on the bands but the $2 figure is just ridiculous. It doesn't take into account other manufacturing costs such as tooling or machine design. It doesn't take into account any research and development costs, packaging, distribution, marketing and promotion etc. Apple are no doubt making a tidy profit off all the bands, not just the rubber ones but $2 is misleading and wrong.

 

[Arbuthnott]

I must admit to be outraged by the cost of the watch. This information about the cost of the sports band vs the retail price simply adds insult to injury. My relationship with Apple has been seriously shaken by the Apple Watch affair. Although I have bought one, I feel very much less positively inclined towards Apple than I ever have in the past. This is a big change for someone who has been a big Apple advocate since 1990; one of the first with a mac.com email address. If I feel like this, I wonder how the less Apple-friendly types are feeling.

 

[ozziegn]

I was tempted in to buying a different colored band for my SG watch yesterday when I picked up my watch but I refused to allow Apple to soak me for $50 for two pieces of colored rubber.

 

[Jsameds]

I hope people don't use the 'R&D cost' card about a damn rubber band.

Material
Stress testing
Length
Colour
Design of buckle
Hole spacing
Hole design
Detail design
Finish
Packaging design

Basically there's a lot more to it than you'd think, despite it seeming like a rather simple item. I can see R&D for the sports strap alone easily running in to the tens of thousands, possibly into the hundreds.

 

[Dilster3k]

Well your 200$ Nike shoes & Beats headphones take 2$ to make too...

 

[bbeagle]

The price of bands is just robbery.

It's not robbery when somebody CHOOSES to spend their money on something that they don't have to.

A bag of potato chips costs $3. It takes about 5 potatoes at 20 cents each to make a bag of chips. That's $1 worth of potatoes. And they charge $3. That's a 300% profit! Is that robbery too?

Pretty much everything you look at is the same. A wooden chair costs $50, yet the price of it's wood is only about $4. A plastic chair costs $10, yet the price of it's plastic is less than 50 cents.

The materials that a product is made out of are not the primary cost to make something.

 

[ShadovvMoon]

The R&D costs of those bands were horrendous - these figures don't even begin to scratch the surface.

/s

 

[Ries]

Another pointless bill of materials article. It's obvious that apple is making an absolute killing on the bands but the $2 figure is just ridiculous. It doesn't take into account other manufacturing costs such as tooling or machine design. It doesn't take into account any research and development costs, packaging, distribution, marketing and promotion etc. Apple are no doubt making a tidy profit off all the bands, not just the rubber ones but $2 is misleading and wrong.

Now really, you can buy one for $10 retail online. If you mass produce it, $2 is no problem. http://www.alibaba.com/product-detail/case-for-apple-watch_60279392815.html

 

[JohnArtist]

That $1.99 drink at McDonalds only cost 5 cents worth of soda.

 

[groovyd]

I guess the story about it costing Apple x billion dollars to design these bands and all the processes and manage the supply chain and packaging and marketing and display space and ... is irrelevant or just doesn't generate the clicks?

 

[mattopotamus]

That $1.99 drink at McDonalds only cost 5 cents worth of soda.

lies, it is on the dollar menu!

 

[magbarn]

Don't buy a Breitling, Panerai, AP, etc etc. Good quality bands are expensive. The stainless band is a work of art.

Big difference when you're using expensive Swiss labor vs pennies on the dollar Chinese labor...

 

[tooloud10]

If they only cost $2 to make, why don't some of you start making them tomorrow and sell them for a few bucks cheaper than Apple does? Think of all the money you'll make.

 

[Attirex]

And ask your local bar/restaurant how much they pay for a bottle of wine, and then ask what they charge for a glass of said wine. Robbery! Hate! Death! Outrage! Get on Twitter!

 

[BeyondtheTech]

Have you seen the no-name wannabe bands on sites like Amazon and eBay that sell for half the price? Some of the quality is meh, while others are laughable. It's no wonder many Apple users don't flinch at the prices of the sport and metal bands.

 

[Websnapx2]

The price of bands is just robbery.

No, robbery is robbery – this is a purchase you can chose or chose not to make. There is no gun to your head, like an actual robbery. There will be third party bands soon enough but the put work into these and – like every other accessory they provide – there is a premium for theirs. However no one is requiring you to buy it.

 

[ncaissie]

I hope people don't use the 'R&D cost' card about a damn rubber band.

Another pointless bill of materials article. It's obvious that apple is making an absolute killing on the bands but the $2 figure is just ridiculous. It doesn't take into account other manufacturing costs such as tooling or machine design. It doesn't take into account any research and development costs, packaging, distribution, marketing and promotion etc. Apple are no doubt making a tidy profit off all the bands, not just the rubber ones but $2 is misleading and wrong.

LMAO