No worries. Clearly I misunderstood your original point as well.
However, im still not in agreement. I doubt Apple is making any more money off the Hermes partnership than if they sold a stainless watch on their own, without the Hermes strap. My guess is Hermes keeps everything above the Watch retail price for their brand name and band. Apple may sell a few thousand more watches sooner than they otherwise would have, but the real value to Apple is selling a watch in a high end fashion boutique to a select customer who may not have even heard about the watch otherwise.
But let's look at the math. For the sake of argument, let's say Apple makes $300 on every Hermes watch it sells, less manufacturing costs, and let's say they've sold 5,000 watches. That's roughly $1.5 million gross, out of which they have to pay all the expenses to market, package, warehouse and distribute the watch.
Now take a $.99 watch face on which Apple takes 40%. And let's say there's a particularly popular watch face that sells to almost the entire 10 million estimated installed user base. That's $4 million PROFIT right there. No costs to cover at all. No matter how you cut it, Apple may not make as healthy a margin, but it's raw profit with the potential to far exceed the actual sales of the watch. Customers may not own more than the one band that comes with their watch, but chances are they will download at least one watch face.
Who knows what Apple will do here, but they've already lost control of the bands. Anybody can market a band for the watch, no matter how ugly it may be. For Apple to take the watch down an exclusive path seems short sighted. Yes they are introducing software to allow multiple pairing for watches with one device, and that's welcome for those who have a gold Sport and a Hermes. But the idea that if someone wants a Kermit the frog watch face they have to buy the Muppets edition watch is kind of silly. and while I sort of understand the Hermes watch, with their high quality leather bands, what's Burberry going to offer besides a brand name and a plaid band? Sure I can imagine someone paying a premium for that -- I bought a black MacBook for a $200 premium. But to do that in order to get a different watch face, especially if they don't want the band? Just how many customers are going to do that? I suspect Apple will sell very few watches for that purpose alone. And based on my little math excercise above, earn nowhere near as much they would by just selling those watch faces freely, for even $.99 a pop. And the irony here is that the watch face is the least visible aspect of the watch, seen almost exclusively by the user, while the most highly visible feature (outside of the featureless square black glass face) is the band, which can make or break the aesthetic of the watch -- and the most customizable part of it.
). Apple will want to protect the image of this being a high end fashion statement in order to maintain the price points. They may see the bands a little like the phone covers and did not have an issues on losing control. But they better keep the image up because I did buy the Link band SS watch and I would hate to see that lose value overnight. Apple has done an awesome job maintaining the value of the phones to the point that you can sell them for hundreds of dollars a year or two after purchase (can't say that about any other phone on the market). I hope they do that with the watch as well.