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

[doctor-don]

As I had noted when the prices were first available on Apple's website, the Watch had to be ordered with a particular band - the one in this article. If a customer wanted the Milanese band, he had to order it separately. However, that was then; now is now. The Watch can be ordered with the Milanese band without having to buy some lame plastic band.

But the price is still too high for ALL of it! That is why I will not be buying this jewelry.

And does it come with a magnifier to see what's on the display?

 

[Gusjasso]

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.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

Fuc... Apple, your robbing this nerds, and they love it!

 

[Robstevo]

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.

I work in an engineering office, and we design and drawing/model building sometimes for like than a hundred grand. Your kidding yourself if you think it would cost anywhere near "hundreds of thousand" for research and development of a rubber band. If it did, people need to be sacked for a gross use of funds.

Because we are talking about a few thousand or hundred thousand, that is absolutely nothing to apple.

 

[Robstevo]

My designer computer desk was custom built for me by a prestigious designer, and the price landed at $2000. The wood and metal is worth around $100.

Should he have charged me $100? Would he still be in business?

Should Apple charge the bill of materials cost of $2? Would they still be in business?

Make your own d#mn wrist strap if it's out of reach of your income. See how far you get!

We pay builders to build. We pay designer builders an extra premium. Deal with it and GROW UP, MACRUMORS.

Your comparing a custom designed desk made from someone you obviously think is special at his job, with a mass produced rubber band made in China lol

 

[sracer]

Your comparing a custom designed desk made from someone you obviously think is special at his job, with a mass produced rubber band made in China lol

Yep. That is what helped Apple become the richest company on the planet.

 

[Jsameds]

I work in an engineering office, and we design and drawing/model building sometimes for like than a hundred grand. Your kidding yourself if you think it would cost anywhere near "hundreds of thousand" for research and development of a rubber band. If it did, people need to be sacked for a gross use of funds.

Because we are talking about a few thousand or hundred thousand, that is absolutely nothing to apple.

You underestimate Apple's passion for perfection.

And budget.

 

[McCool71]

The price of bands is just robbery.

I agree, it is an insane markup, especially for the sports band which is (let's be honest here) just a piece of rubbery plastics-material and not a hi-tech superadvanced thing like some people seem to believe just because it is from Apple.

Great for Apple though; must be excellent when you can make back the cost of manufacturing more than 20 bands on just one sale. And of course this allows them to offer a selection of colors, something that might have been a bit risky (there will always be some variations that sell less than projected) if they just earned 15 bucks per band.

The high price is of course excellent for third party suppliers of bands as well. Now they can make 20 bucks easily per sale and still sell at less than half the price of the 'original'. Usually I would think these manufacturers would be happy with selling for 5 bucks per band - and still make a killing when it comes to profit.

 

[Glideslope]

Just 2.8 million? Wow, that's less than even I thought.
What a joke. Steve is completely face down in his grave now. The rolling over is long gone.

 

[senseless]

That's what our computer said. Managed the place for a couple years. We certainly saw huge revenue. Bonuses of over $100k in a year. Speakers would run say $200 and store cost would be $30. The markup was always silly but we have to remember that they also have to pay commissions, pay my wage, insurance, shipping to the store, packaging, and pay those running corporate plus all the development and manufacturing costs.

It's not as simple as "They pay $2 to make something that they charge $49 for." There are countless other costs that go into it. Apple and everyone else would be 100000x richer if it was just as simple as these articles make it seem to make profits.

It may have been an accounting thing since the company owned the stores anyway. I worked for RS the summer I got out of HS. We had to hand write the receipts and look up bad credit card numbers in a weekly booklet.

 

[vladzaharia]

Genuine question: So "Configuring an entire computer system on a single chip is an industry first and represents a singular feat of engineering and miniaturisation" is a bold faced lie?

( From: http://www.apple.com/uk/watch/technology/ )

I'm sure it's technically correct (which is the best kind, obviously) because it includes certain chips that aren't usually included in a System in Package. SiPs are used a lot more in industrial and miniature applications, where the components involved would be different. The idea of SiPs as a whole is nothing new, and SiPs are really just an extension of SoCs (System on Chip, it's what A4-8X are) but it's probably that no SiP before has had the components that would usually go into a computer in one package.

The reasoning behind this is probably twofold. Firstly, as I said before, SiPs generally speaking are industrial or miniature so their components are different. Let's think of a simple MP3 player (think of like Sansa clip, a small MP3 player which has one purpose). It would most likely have a general application processor of some kind, some memory, and some chips dedicated to audio processing, maybe a display controller. So there's some similarities with a computer, but it's missing a lot of things you and I would call a "computer system" like networking chips, an actually usable amount of RAM, etc. Now on the second hand, computer systems don't need to be miniaturized. The components of our phones and computers are pretty similar, so for the purposes of this discussion we'll say what's in a phone is a "computer system". Now let's think of the dimensions of a phone. While still cramped, there's plenty of room to actually have all these components still separate on the device. And then we only really go up from there. Not very many devices until now really needed to pack all those internals into one small thing, and keeping all the components separate is usually preferred, since you can, for example, use both sides of a motherboard (which other watches do), and purchase all these regular, off the shelf components and put them in, instead of having to miniaturize each one and build a complicated SiP for it.

So Apple is kind of just giving themselves a pat on the back for doing something that wasn't really necessary and isn't really new. They just took something existing (SiPs) and took it a step further than anyone else really felt it was necessary.

 

[inscrewtable]

The price of bands is just robbery.

Surely you mean 'The price of bands is just rubbery'

 

[Tech198]

I remember Tim Cook always likes to play the cards down on this one too... "You don't know the cost because their not off the shelf parts bla bla bla... blip blip blip..."

$2.05 on the Sports Watch Band 38mm is not bad considering.

 

[rocknblogger]

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

/s

The R&D argument is getting tiresome to read. Apple like most other companies has an R&D budget that's constantly being deposited into by the sale of everything Apple sells. In other words, a sale of any Apple products contributes a percentage of the sale to future and current R&D research.

No one knows exactly what percentage of R&D went into the rubber band (elastomer by any other name is rubber). So yes when you break down the cost of the rubber band it probably is around $2.00. Add a couple dollars for packaging and delivery and maybe you bring the price up to $5.00. No matter how you slice it Apple is making a killing on these bands.

Furthermore once they sell X number of bands they will have paid for all the R&D and the resulting profit is astronomical. Apple charges $50 because they can get away with it. Their marketing techniques are about the best in the world. They have the ability to make anything they sell seem "prestigious".

So let's stop pretending like Apple deserves to to sell these at A 400% profit and that we should be happy for them and continue opening our wallets.

Rant/

 

[inscrewtable]

Point of the story...

I thought the point of the story was going to be that Picasso could buy an Apple Watch Edition with three pencil strokes.

 

[ColdShadow]

I have to say it won't affect me,I have zero interest in Apple watch.I wouldn't buy one even at half this price (honestly) and if I get one as a gift I will sell it.I think it's a useless product,limited,UGLY,and just a waste of money.it's not even "cool".it's the worst Apple product I've seen and I think it's another "hobby" grade product at best.
I have to admit,for the first time I'm actually pleased to hear an Apple product not selling well.

 

[AppleScruff1]

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?

Do you really think they spent billions on just the bands? Then the watch itself must have been tens of billions.

 

[DellaReese]

I'm pretty sure that R&D cost has minimal impact on the retail price that Apple sets on the bands. As a whole, accessories contribute little to Apples profit. More likely the Apple marketing folks are trying position the bands to be treated as high end fashion accessory and are pricing them as such.

 

[Judas1]

Some people on here are really kidding themselves about how hard Apple worked. The only research and development Apple had to do was to design the band and test it out. Thats it. After that, its up to some contracted manufacturer to do the rest. Apple did did not have to research the material because somebody else invented the rubber. They just had to buy the materials. Apple did not have to research the manufacturing process because thats the job of the company they contracted.

 

[thirteen1031]

Steve is completely face down in his grave now. The rolling over is long gone.

Sigh. Here we go again! Such hyperbole over one little device and its early numbers. Look. Jobs picked Cook, so he must have trusted the man's vision for Apple; and Jobs certainly trusted Ives who invented the watch. So...roll over in his gave over the watch and it's sales? I think not.

Let's also keep in mind that Jobs was behind such winning tech devices as the Next computer and the Apple G4 Cube (Tissue box). And when Jobs brought out the iPhone, its sales were disappointingly slow and low. First generation adopters are risk takers (and willing to pay more), and so they tend to be few. When the second generation comes out, and the price is lower, and the path is seen to be safe...that's when you really find out if people want to walk it.

Which is to say, even if the watch doesn't perform as anticipated (and I don't think we should be carving its headstone yet), I doubt that Jobs will be "turning over in his grave." If anyone was able understand that not everything one hopes will fly flies, it's was Jobs. I think, to the contrary, that far from rolling in his grave, he's looking down with a lot of understanding on Cook and what Cook is doing. And I think he appreciates Cook taking a big gamble...but not risking the farm on it. It's a very Jobs-like move.

I also think that Jobs would be very happy that Apple is still a billion dollar company and doing extremely well. Come back when the company is on the verge of bankruptcy. Your overblown "rolling over in his grave" comment might finally make sense.

 

[BvizioN]

View attachment 562186

He is right though. As usual. close minded people don't take into consideration anything else except the raw material as though things just magically happen for Apple. Hard to believe anyone can be that naive!!

 

[iChrist]

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.

Thank you. It is always interesting to me to read the opinion of someone who is easily duped by marketing. It helps me understand how to make more money myself by exploiting this lack of logic.

 

[thirteen1031]

close minded people don't take into consideration anything else except the raw material

True. However, I think we can all agree that the watch bands are overpriced. We may quibble about how overpriced given all the factors beyond raw materials, but we will agree that they are overpriced. That said, Apple does have watch buyers currently over a barrel as these are the only bands they can currently buy. Especially given that the watch won't work if it's not on your wrist. When third party bands appear, as I think they will soon, then we'll see. I predict one of three things will happen:

(1) 3rd party bands will outsell Apple bands thanks to their affordable prices, (2) Apple will lower it's prices on bands at least a little to compete, (3) Both #1 and #2.

I think we should all keep in mind, however, that a watch band isn't like an iPad cover or a phone case. The band is essential. Not only won't the watch work without it, not only is it on the person's wrist every day for long hours (and so must be comfortable, water resistant and flexible), but if it's weak or breaks, then a very expensive device may be lost or damaged (imagine it happening to someone with their arm dangling out a car window, for example, while the car is in motion).

So, yes, the bands are overpriced—but can clones of them be made cheaper without sacrificing quality? Quality being ultra-super-important in this case? Maybe. Maybe not. Which is why I'll add a fourth prediction: (4) The cheap watch bands live up to their name (cheap), breaking or failing and buyers go back to Apple watch bands because they'd rather have a reliable band than risk their watches on a cheap one.

Whatever happens, this I can say for certain: however cheap, I won't be buying a 3rd party band as impulsively as I do a phone case. Reviews on that band will have to assure me that it will keep a good grip on my watch as well as on my wrist before I'll consider buying one.

 

[thirteen1031]

It helps me understand how to make more money myself by exploiting this lack of logic.

Unless it also helps you understand how to make products as appealing as Apple's, then it's a wasted lesson.

 

[Dammit Cubs]

$2!!!!! Jesus!!!

 

[Maxwill]

$2 for a sport version band...the point is how long it can work