So, I was a little bored, and got to wondering: why should an Apple watch cost $12,000. Answer: it shouldn't. See below.
Watch weight:
42mm Apple Watch (stainless) + sport band: 50g (case); 40g (band)
42mm Apple Edition (yellow gold) + sport band: 69g (case); 42g (band)
Densities:
18K yellow gold: 15.6 g/cc
316L stainless steel: 7.99 g/cc
Market data:
spot price 18K gold (4/27) = $31.77/g (mid market)
The math:
V = Volume of metal in case (cubic centimeters)
M = Mass components other than case (grams)
Apple Watch Case:
7.99V + M = 50
Apple Edition Case:
15.6V + M = 69
Volume Case:
15.6V + 50 - 7.99V = 69
V = 2.50 cc
Apple Watch sport band:
7.99V + M = 40
Apple Edition sport band:
15.6V + M = 42
Volume Clasp:
15.6V + 40 - 7.99V = 42
V = 0.26 cc
Cost of 18K gold case:
2.5cc x 15.6 g/cc x $31.77/g = $1239.03
Cost of 18K gold clasp:
0.26cc x 15.6 g/cc x $31.77/g = $128.86
Gold content: $1367.89
Retail price Apple Edition (42mm) $12,000
Assumptions:
Component cost minus metal of case and case best reflected in price of Watch Sport ($399).
Apple margin ~50% ($200)
Tooling cost congruent for aluminum/stainless/gold
Watch Edition Margin = $12000 - $200 - $1367.89 = $10.432.11
Watch weight:
42mm Apple Watch (stainless) + sport band: 50g (case); 40g (band)
42mm Apple Edition (yellow gold) + sport band: 69g (case); 42g (band)
Densities:
18K yellow gold: 15.6 g/cc
316L stainless steel: 7.99 g/cc
Market data:
spot price 18K gold (4/27) = $31.77/g (mid market)
The math:
V = Volume of metal in case (cubic centimeters)
M = Mass components other than case (grams)
Apple Watch Case:
7.99V + M = 50
Apple Edition Case:
15.6V + M = 69
Volume Case:
15.6V + 50 - 7.99V = 69
V = 2.50 cc
Apple Watch sport band:
7.99V + M = 40
Apple Edition sport band:
15.6V + M = 42
Volume Clasp:
15.6V + 40 - 7.99V = 42
V = 0.26 cc
Cost of 18K gold case:
2.5cc x 15.6 g/cc x $31.77/g = $1239.03
Cost of 18K gold clasp:
0.26cc x 15.6 g/cc x $31.77/g = $128.86
Gold content: $1367.89
Retail price Apple Edition (42mm) $12,000
Assumptions:
Component cost minus metal of case and case best reflected in price of Watch Sport ($399).
Apple margin ~50% ($200)
Tooling cost congruent for aluminum/stainless/gold
Watch Edition Margin = $12000 - $200 - $1367.89 = $10.432.11