Possibly. The teardown after release will reveal the true price of the materials.
Then we'll know, minus R&D and manufacturing.
I can almost guarantee it will not be remotely close to the $350/$400 retail price.
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Apple Employees to Receive 50% Off Apple Watch and Apple Watch Sport Models, $550 Off Gold Model
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Possibly. The teardown after release will reveal the true price of the materials.
Then we'll know, minus R&D and manufacturing.
I can almost guarantee it will not be remotely close to the $350/$400 retail price.
You know, I'm a hearing aid audiologist, and I used to be an expert 'question answerer' on a forum for people experiencing hearing loss.
I used to see this kind of nonsense all the time about the cost of hearing aids. People writing that they could design one in their shed and sell it for $50 etc.
Life is never that simple. It isn't about what Apple can make each unit for. How many millions did it cost them to go from, let's make an iWatch to look here's the Apple Watch.
There had to be dozens of prototypes, mock ups, 3D printing, dozens of people with salaries and benefits, and paid time off.
Then there was setting up an entire manufacturing process from how to make the sapphire crystal fit so perfectly, to how to get force push to work. The exact process to go from raw materials to a finished case. Then coming up with an entire manufacturing process that can produce these items on the kind of scale Apple need.
Have you ever watched Shark Tank? Some of the entrepreneurs who have invented a widget have often spent $500K or more to go from initial concept to a working prototype. In the case of the Apple Watch the cost of getting to where Apple are today with this project must be astronomical.
So even if it were indeed possible to mass produce this device for $60, which I do not on any level believe. They still need to raise enough money from the sale of this product to pay for all of the development costs, while coving their overheads. They are dedicating millions of dollars to repurpose part of their stores for this launch, training thousands of employees. That also has a cost. Some accountant at some point had to figure how many square feet of space they are taking up in their stores with this product, and how much revenue per square foot they can generate. Some justification has to be made regarding the investment in the training and space in the store.
I could continue, but hopefully you get my point. The products we buy in stores are marked up. That mark up pays for all kinds of hidden costs from advertising and marketing, employee costs, general overhead costs, supply chain, development, packaging, theft, insurance, wastage, and much much more.
If Apple sold their product for the prices you think they should, then they would eventually go broke.
I for one want to see Apple succeed. I want them to make a healthy profit. If Apple is a strong company then they can support the products I have bought. I get nice things like free OS updates. Remember when Microsoft ruled the world, and thought they could charge $150 every couple of years for a new OS? And every other one sucked?
So unless you're the CFO of Apple, your opinion as to Apple pricing and mark up is as silly as me trying to teach you how to fly a space ship, when I've never flown one.
Okay found this reply from you , I can see your point about buying something with that will hold its value over time. They problem is that computer or cars, unless they are a limited run will depreciate as soon as you take them out of the shop. Sure Apple products and certain cars hold thier value relatively well, but given their cost, you take a hit on the depreciation.
You seem to love apple products , enjoy them! There are some awesome ones available at present, with more to come.
I think the watches are overpriced especially the model I want... and not the Edition. The base model at $349 is hard to say "overpriced" when you see that Pebble ugly thing or the Moto 360 which I also liked.
$1100 for the one I want is the part that hurts. The SS version is a very nice looking product but with the Space Gray Band it should be closer to $500-$600 in my mind.
I wish they would drop in price - especially the bands.
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Thank you... I just like the quality all around and supporting a wife and kids is way easier than Windows. Trust me, I know Windows very well. I started out with DOS and pushing chips into mother board to upgrade to 64K RAM. My one regret was not buying apple stock in 2004 when it was about $10 per share pre-split.
Granted, Apple Watch is definitely prettier than other smartwatches on the market today. But I fear that part of Apple's initial asking price for the watch is based primarily on a fashion standpoint. You're not just buying a watch, you're buying a fashion statement to make you noticeable and to make you stand out from the rest of the crowd wearing uglier smartwatches.
I don't want to be a part of that. I just want to buy a smartwatch.
What does the price of the materials have to do with the final price? Marketing, 2 years of development with dozens of employees, making web sites, videos, Watch OS software, training, paying employees, display cases costs, demo watch costs.... there is so much more that costs than just the parts!
My one regret was not buying apple stock in 2004 when it was about $10 per share pre-split.
You nailed it right there! I've moved all my family and close relations onto apple products, live is so much easier for everyone , including myself that was the IT guy for the family . I still dabble with PC desktops for gaming and cause I enjoy building water cooled machines
Wait, what? Websites, videos, employee training, display cases, etc should not be costs that are passed onto the customer and added to the cost of the device. That's messed up. That should be Apple's cost of doing business.
The only costs of a product that should be passed onto the customer are things that went into the development and manufacturing of the device itself. Hardware, software, R&D, and manufacturing. That's it.
Were that life were that simple.
J C Penny recently got a new CEO. He announced no more sales, no more gimmicks, no more coupons, no more sales. Just honest fair low prices all the time. That way you wouldn't buy a suit or a pair of pants one week, only to find a 30% off coupon in the newspaper the following week, and kick yourself.
Certainly makes sense to me. Fair pricing, not having to wait for a coupon or some nonsense sale. No more marking prices up, just so you can have a more impressive looking sale.
The market hated it. Customers left them in droves. Sales plummeted. Profits fell.
Turns out the consumer didn't want fair and honest pricing. They want that feeling they get when they feel like they are getting a bargain.
It's like people who argue that instead of having Powerball give one person $300m, it would be fairer and give better odds if Powerball gave 300 people a million dollars.
But all the research shows that as irrational as it is, once the jackpot gets over $200m, people get whipped up into a buying frenzy. Ticket sales go through the roof. Thus tax revenue, and the money that the lottery makes for charity is higher.
As stupid and irrational as it is to make the odds over 150m to one, just to keep getting those rollovers so that the jackpots get insane, it does in fact raise more money for the charities, which is kind of the point of the whole thing.
So Apple could sell their products for lower prices, and never discount anything. But I don't think there is any evidence to suggest that the market would respond well to that.
Seems to me based on the valuation of the company, that greater minds that you or I are making some very smart choices about how to run the company. Steve Job's parents garage to the biggest corporation on the planet. Not really a bad transition if you ask me.
One shouldn't mention cars and electronics in regards to safety. Common rule is nothing made in China when it comes to safety. Too many issues in the news regarding toys with high amounts of lead, poisoned dog food, home building materials made with banned hazardous materials, etc. Even personal negative experience with German made Good Year tires when switched to China made. Would never set foot on a car, aircraft, elevator, etc. either.
Makes good business sense for Apple to offer their employees such steep discounts on the Apple Watch. It'll help get them more excited about the product. More excitement about the product translates to more enthusiastic attitude about it on the sales floor, which will translate into more sales. Win win. Smart man that Tim Cook.
You know Tim Cook didn't come up with the idea of employee discounts for new products, right?
Offering employees discounts on wearable items to show them off to potential customers is an old retail trick.
Apple Store employees make so little. Heaven forbid Apple lets the employees enjoy the products they sell.
from what I read previously, the gross margin on an iPhone is around 55%
Main components being
Materials
Transport/warehousing
Labour
Warranty
You know there are online courses you can take in business studies that will help you a lot. It can't be fair to go through life so ignorant of how the world works.
When a project like the Apple Watch comes along a for profit company has to consider EVERY cost associated with that project, from R&D, to designing and building the display cases, everything. Someone even calculated how many square feet of the store would be repurposed for this project, because in retail you have to consider the revenue per square foot, to maximize the efficiency of the retail space that you have.
A company like Apple has to figure out every last dime that was spent making Apple Watch happen. Figure out how much they will be able to manufacture each device for, and how much profit they will need to make to make the whole project worthwhile.
You can't just say that large chunks of the cost of this project are 'the cost of doing business.' The world is not like that at all. If Apple spent $100m bringing this to market, and another $10m in staff training and rearranging the stores. They can't just say, oh well that $10m is the cost of doing business.
As a company you have to make back what you spent, and make a profit. That's kind of the point of a company. If businesses operated as you suggest, they would go bankrupt.
Apple is not a benevolent charity with a desire to issue every man, woman and child with an Apple Watch for free.
They are a company who invested heavily to make a product, marketed the product, trained their staff to sell the product, figured out how to make it on budget on a huge scale to a specific quality. Now they need to recoup all of that investment, and walk away having made a profit overall on the sale of Apple Watches.
This is business 101. It's how business works. I'm not sure why you are so confused.
Since Apple is offering the discount at pre-order time I wonder if this is any clue that Apple is confident they will have enough stock for launch.
Egaah I think I just threw up in my mouth a little.
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I'm not confused. I'm just saying that it doesn't seem right.
Especially knowing how much the gross margin of an iPhone is. Something tells me Apple makes PLENTY of money to cover the cost of anything having to do with the product they're selling, and much more.
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I think you're wrong on the value of the band. If you read Apple's web site they claim that the standard stainless band costs 9 hours to cut out and contains over 100 parts. It has two major innovations that I have never seen on a bracelet before (including on high end Swiss watches). It can be detached from the watch without a tool, and links can be removed without a tool. Those are huge innovations.
Also the space black version requires some special treatment above and beyond the regular steel one to make it that color.
Considering with all those innovations you can buy that band for $449. That's a pretty good value. Go price the bracelet for any major Swiss brand, they can easily cost double that. Just for a bracelet.
Yet Microsoft gave every employee a Lumia and a Surface...completely free. INFINITE MARKUP PROOF!!!!!!!
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What exactly makes you think 50% off means "at cost"? Plenty of companies lose money on something like this because it's worth more than you lose.
I think your beef is with Capitalism in general. Any for-profit business is going to charge as much as they think the market will bear. The financials of all publicly traded companies are available for anyone to examine. There's noting dishonest about it unless they're misrepresenting their numbers.
I'm looking at architects to draw some plans for a house. One of them is very high priced compared to the others. That doesn't mean he is dishonest.
Egaah I think I just threw up in my mouth a little.
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I'm not confused. I'm just saying that it doesn't seem right.
Especially knowing how much the gross margin of an iPhone is.
This is based on research done and not apple's official statement. So I would not quote that 55% as fact, it's the top end figure.
Not exactly.
Drug dealers can charge as much as they want for their product up to a point because they know people are addicted to them and must have them, at any cost.
All I'm saying is some businesses operate with that same mindset, and I don't agree with it.