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

Mercifull said:
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.
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Even with R&D for the simple rubber sport band we aren't talking a huge jump from that $2 tag. They are still probably making 5-10x profit on it, if not more. That said, I don't think the $49 price tag is unreasonable for one, but if/when we see third party bands I would expect them to be about $15 cheaper.

Attirex said:
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!
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Alcohol has one of the most ridiculous markups out there, especially fine wines. They have people brainwashed to think that things like "happy hour" prices are actually good deals.
 
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ZCP said:
Let's say it cost them $350,000 for ALL of the R/D, including design overhead and tooling. And let's assume COGs, including packaging/shipping, and any other variable costs, is $15. Apple would only need to sell 10,000 bands to break even on sunk costs.

They sold an estimated 2,800,000 WATCHES already. I have a feeling they broke even within a day of the bands going on sale.
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And that's why they are so damn successful.
 
Arbuthnott said:
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.
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This may seem like some sort of attack on your but please don't read it as such. It's just a general statement towards all of the responses of this type that I've seen over the years on sites like this one.


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I see responses like this and it makes me shake my head. Apple is a for-profit company. They exist for the primary purpose of making money. Lose the warm and fuzzy emotional attachment to their marketing and any sort of "history" you have with them. If you like their stuff (and they make pretty great stuff)....then buy it. If you don't, then look elsewhere. But don't blindly buy in just because you had an email address with them 20 years ago.

Apple is a hardware company. They make their money on selling you stuff at a high margin. If you don't like how high of a margin they charge, then you have the power to voice your displeasure with your wallet. But being a blind loyalist and buying a product that you admittedly say you are "outraged at the cost of" and then complaining about it after the fact make absolutely zero sense.
 
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joshen said:
I hope people don't use the 'R&D cost' card about a damn rubber band.
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"You're forgetting about the R&D costs of the rubber band."

"No one's got a gun to your head. If you don't like it then you can GIT OUT!!"

"In between his Bay Area escort service visits and his recent backpacking trip in Patagonia, some geek at Apple had to push a few buttons on a computer to create that rubber band. And it's not just a rubber band, it's a work of art. If you had ANY respect for people in the technology sector, you'd pay whatever price they ask of you. Because let's face it... Those escort services aren't cheap."

... What am I missing? :p
 
nikaru said:
You must be brain damaged to buy extra bands from apple when the third party market is capable of offering the same thing for a lot less money. Yes, the same ****ing thing, even with the same or superior quality. What do you think? That Apple just become the best blacksmith and leathersmith in the world? Nope! Their band are nice and high quality as everything from Apple but nothing apart from the lable makes them special o exclusive.
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Today I bought the leather loop. Beautiful band. Feels great on my wrist and it just wreaks of quality. I own expensive watches with great bands and this is up there. How it wears over time I cannot answer yet. That will be the real test. I have followed the 3rd party band thread on here and some of those bands should be burned at the stake. Cheap Chinese rubbish at best. Why spend so much on watch and $20 bucks on a band. It seems ridiculous to me.
 
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Mr Fusion said:
"You're forgetting about the R&D costs of the rubber band."

"No one's got a gun to your head. If you don't like it then you can GIT OUT!!"

"In between his Bay Area escort service visits and his recent backpacking trip in Patagonia, some geek at Apple had to push a few buttons on a computer to create that rubber band. And it's not just a rubber band, it's a work of art. If you had ANY respect for people in the technology sector, you'd pay whatever price they ask of you. Because let's face it... Those escort services aren't cheap."

... What am I missing? :p
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what about the whole

"it's more than the sum of its part, is a Apple system that deliver amazing performances. I wouldn't trust any other bands because they are just inferior"??

The amount of kool-aids is amazing
 
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iPhysicist said:
You just don't have no clue at all.
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Oh yes I do. We’re in the power electronics industry. We venture into new products just like Apple does and in most cases, (just like Apple does), use existing technology and processes for hardware that is completely redesigned. We refine our exisiting products just like Apple does, sometimes to make it better for the sake of it and sometimes to take care of gaffs.
This is all to save cost and also to evolve our current tech first and foremost. We also have a division that looks at completely new tech.

If you think Apple build it all from scratch and suffers massive expenditure in doing so I just don’t know what to tell you.
 
nikaru said:
You must be brain damaged to buy extra bands from apple when the third party market is capable of offering the same thing for a lot less money. Yes, the same ****ing thing, even with the same or superior quality. What do you think? That Apple just become the best blacksmith and leathersmith in the world? Nope! Their band are nice and high quality as everything from Apple but nothing apart from the lable makes them special o exclusive.
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I don't think you get it.

Yes, the Apple bands are high-priced, and yes, the third party market will eventually make cheap bands, okay bands and good quality bands, some with better quality than Apple bands.

Apple designed the bands. They didn't go out to a manufacturer and say 'make me these bands'. They had to spend time designing the bands with the lock/slide-in technology, and spent time choosing materials. It wasn't something they could just do immediately. The Apple brand is on the line here. They can't produce some cheap leather that rips 2 days later. They did lots of testing.

Now, some joe schmo company can come in, copy Apple's band exactly, not any R&D there, choose any material they want, and create a band pretty much the same day they choose to do so. And if they make the band for 20 cents and sell the band for $10, and it breaks apart in 2 weeks, there is no reputation of their company to destroy. You already thought they were a poor company anyways.

Plus, their $9.80 profit, and Apple's $48 profit don't match. Apple had to pay for R&D, with many variations of its bands that they tried for months and threw away, while the smaller company did not. After taking that into account, Apple might be profiting LESS than the joe schmo company. Maybe Apple has a net profit of $5 per band, and the other company has $9.80. Who exactly is 'ripping you off' now?
 
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Arbuthnott said:
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.
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They definitely DONT feel burned because they are listening to analyst ******** lol. The sport band should be $49, and if Apple decides to go nuts, they can drop the price around christmas to $29. The reality is YOU CANT MAKE THE SPORTS BAND...and if you can, if it's that easy for tooling and machinery to create the perfect sports band for the watch, then by all means, go do it.
 
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Cuban Missles said:
I have the link band, and I totally agree. When I went into the store, I had no plan to spend money on the band, but after trying it on, my wallet could not talk me out of it, no matter how loud it screamed.

I have no regrets, just debts ;)
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The fact that you do not need a tool to remove links so you can do it yourself rather than taking it to a jeweller is just genius. And yet they lock in so tightly and precisely better than a band that requires special tools. That's just thinking about an issue and addressing it, pure Apple :)
 
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Mercifull said:
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.
Click to expand...

Yes right, professionals are wrong, and delusional people who would rationalize anything are right.

2$ price does include diluted cost of shipping, research, marketing etc... A 200,000$ budget for research diluted in 2 millions of Apple Watch amounts to 0,1$ per watch.
 
Mercifull said:
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.
Click to expand...
I agree.
 
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djcerla said:
A genuine Tag Heuer silicone strap is €150-200 depending on the watch model.

I have one for my Monaco and is way less comfortable than Apple's one.
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Why can't people understand this. It's beyond me. Agreed super comfortable band :)
 
Galley said:
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.
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They'll sell tons as is.
 
ugahairydawgs said:
This may seem like some sort of attack on your but please don't read it as such. It's just a general statement towards all of the responses of this type that I've seen over the years on sites like this one.


-----


I see responses like this and it makes me shake my head. Apple is a for-profit company. They exist for the primary purpose of making money. Lose the warm and fuzzy emotional attachment to their marketing and any sort of "history" you have with them. If you like their stuff (and they make pretty great stuff)....then buy it. If you don't, then look elsewhere. But don't blindly buy in just because you had an email address with them 20 years ago.

Apple is a hardware company. They make their money on selling you stuff at a high margin. If you don't like how high of a margin they charge, then you have the power to voice your displeasure with your wallet. But being a blind loyalist and buying a product that you admittedly say you are "outraged at the cost of" and then complaining about it after the fact make absolutely zero sense.
Click to expand...
Gotta admit. This is it.
I’ve slowly learned, (as much as I might love and still buy their products), that Apple amongst other companies don’t give a hoot about me, or probably anynody else for that matter.
 
Was the projected sales of these to be about 15 million?

I think they are doing a really fantastic job, but 2.8 million does seem a bit low for apple.
 
bbeagle said:
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.
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Huh? The article says it costs $2.05 to make the band. That's A to Z -- not just materials. I don't consider this "robbery" as everything has a price in the market, but I don't think your analysis furthers the conversation...
 
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