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

[Fzang]

Do you people honestly believe that Apple is the first company in the world to design a wearable piece of rubber, which warrants R&D costs into "hundreds of thousands"?

I am now thinking how all these hundreds of thousands of products also sold in China, maybe even from the same factory, could be designed, machined and sold for fractions of Apple's price. Or did you think that Apple had their rubber bands made from $15/hr workers in the US?

 

[AleXXXa]

Don't buy a Breitling, Panerai, AP, etc etc. Good quality bands are expensive. The stainless band is a work of art.

A work of art? Nope, it's not. For me it feels cheap, rattly and not that comfortable. Well, it kinda is cheap, is around $500 i believe. Look at a GrandSeiko steel bracelet, that is a work of art, but it's not just $500.

 

[DiceMoney]

I went to the Apple store, because I had an issue with the screen of my Iphone, like two weeks back or so. I had yet to see an Apple watch live, a couple store employees had them on. Two things I noticed while I waited by the side of the Store, as I waited make an appointment for like 20 minutes or so.

Only one customer looked at the watches, this is in Miami, pretty busy store, there were two tables full of watches, and while I waited, only one guy was looking at the watches. The tables with the watches are planted right in the middle of the store. Like three employees were there idle, because no one seemed to want to approach this tables, which I guess the employees were there to attend.

When I eyed the employees wrists, which they did happen to have apple watches sports version. They look pretty bland, and cheap looking. Now, is not surprising to hear, Apple is really having such a huge mark up.

 

[iChrist]

True.

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).

True. It is important watch band does not break, given the larger, fatter size of current iWatch. Agreed.

 

[KmanOz]

I went to the Apple store, because I had an issue with the screen of my Iphone, like two weeks back or so. I had yet to see an Apple watch live, a couple store employees had them on. Two things I noticed while I waited by the side of the Store, as I waited make an appointment for like 20 minutes or so.

Only one customer looked at the watches, this is in Miami, pretty busy store, there were two tables full of watches, and while I waited, only one guy was looking at the watches. The tables with the watches are planted right in the middle of the store. Like three employees were there idle, because no one seemed to want to approach this tables, which I guess the employees were there to attend.

When I eyed the employees wrists, which they did happen to have apple watches sports version. They look pretty bland, and cheap looking. Now, is not surprising to hear, Apple is really having such a huge mark up.

Well I did the same. In my local store I saw the complete opposite. Quite a few purchases while I was there. Your point is?

 

[nikaru]

Apple charges $49 for a $2 band, totally justified. Monster charges $49 for a $5 cable, highway robbery.

Yeah, its true, but if

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?

I dont feel ripped off by Apple. Their pricing strategy is well studied and they put great effort into providing the best bands possible for their watch. The problem is that the bussiness with bands and other accesories such as cases, docks, etc. is different from the one with hardware or software. You cant buy a OS X notebook if it is not from Apple, you cant buy iOS device, except from Apple. But if you want a high quality band for your watch you dont necessary have to buy it from Apple. In fact, for under 100$ you can buy a watch band made from the finest italian leather with silver closing buckle that is actually made in Italy and it is handcrafted. You can also buy a stainless steal band for under 250$ that is actually Swiss made and has lifetime warranty. Since the watch band is fashion accessory, what a fashion-driver person will do? Buy Apple band that is well crafted y designed but it is made on machine in China or buy a premium band from a third party renewed Italian, Franch or Swiss manufacturer.

My point is that for bands that expensive Apple could have made the effort to manfacture them on american soil which in turn could have made them quite more attractive for most customers. My other point is that you cant pretend selling fashion accesories that are made entierly in China charging a premium price which in the fashion world requiers not only a premium fit, design and finish, but also a premium source of manufacturing.

Currently, in my opinion, the apple bands are priced +20%-50% more than what is acceptable for the mass customer. Although apple products have always been more expensive than its main competitors, Apple is not a butique store, and shouldnt be if it target are the wide public and not only a few rich customers.

 

[mi7chy]

This band looks premium and should be at least $700.

 

[szw-mapple fan]

It only cost $2 to make the bands at the volume that Apple is making them. If you were to go to an independent manufacturer and only, say, 100, then the cost would probably by drastically higher.

 

[Bodie CI5]

View attachment 562186

Best. Picture. Ever.

Made my day with it


I'm still in two minds about the Watch - especially now with rumours of a 2nd gen possibly on the horizon (well, somewhat off in the future)

 

[sracer]

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!!

He's not right. Not unless he has access to Apple's expense sheets on the production of those sport bands. While Apple does make quality products, they also MARKET them... that means telling a story that goes beyond the product itself. In the same vein of the DAK catalog of the 70's/80's or the fictional J Peterman catalog from Seinfeld, Apple tells a story behind the product.

I wouldn't be surprised if Apple produced a 20 minute documentary showing all that goes into making the Sport Band that would leave some believing that at a retail of $50 Apple is losing their shirts.

Sometimes a rubber watch band is... a rubber watch band.

I'd venture to say that most who are posting about the cost of raw materials alone are just making a drive-by comment that summaries their opinion that Apple products are obscenely overpriced.

 

[Abazigal]

My point is that for bands that expensive Apple could have made the effort to manfacture them on american soil which in turn could have made them quite more attractive for most customers. My other point is that you cant pretend selling fashion accesories that are made entierly in China charging a premium price which in the fashion world requiers not only a premium fit, design and finish, but also a premium source of manufacturing.

I live in Asia. Is there a point to a product being manufactured in the US, barring a sense of patriotism and it supporting employment in a country which simply doesn't apply to me?

My understanding is that the US workforce should be better educated and it doesn't seem like there would be any benefit for labour-intensive and low-skilled tasks like putting together a watch band?

 

[BvizioN]

He's not right. Not unless he has access to Apple's expense sheets on the production of those sport bands.

Ok. But that goes both ways. He can't be wrong and the other guy (or even better other forum members here) who says it only costs $2 or whatever for that matter, be right (unless these guys also have access to Apple's expense sheets, which I quite doubt it)

There is just so much Apple marketing can do. If they market a ****** product people are not gonna fall for it. And there are things that Apple does market that aren't so great. I personally don't give a toss about any add of apple watch wrist bands. I have 2 sport and leather loop and have tried all the rest of them on my wrist. I have yet to see any third party wrist band that can match the look of the Apple ones. And believe me, I desperately want a third party wrist band that can look as good and match the quality of Apple ones so I can save some money, because after all I do believe they are overpriced. But to speculate that they only cost apple a dollar or 2 to make is just laughable.

 

[andy742]

There's probably more engineering, design considerations and cost required on the sport strap than the similarly priced iphone case.
So what's the big surprise - they're not selling at cost price? Shocking!

I bought my Apple Watch with the leather loop band and it is one of the most comfortable watch straps I've ever owned - and I have about 30-40 watches.
I've since bought a couple of sport watch straps and find the material and comfort exceptional! I wasn't a fan of the buckle originally but it's Apple so it has to be original, and it works very well in fact.

 

[Arndroid]

It seems to me the real story is lost in all this blather about the gross margin on plastic bands. What about the sales number, 2.8 million watches? That estimate is far below the whisper numbers (one was seven million) that were being floated recently.

Yes the 1.5 billon dollars in watches they sold, not counting additional bands is surely an unmitigated disaster.

 

[Arndroid]

Most of that has been done in part already. I’d suggest the cost is a lot less than you think. The cost of R&D for Apple as a whole may be high but for this one item, no.

Hole spacing, really?

When Ford design a new car, they already know how an engine works, how many wheels it needs and how many people have to get in it. They know all this from back in 1908. They component share, platform share and tool share. They don’t throw out all teh production gear when they stop making it, it actually gets cheaper and easier assuming they didn’t balls it up the first time around.
Companies tell you rubbish like that so they can rape your wallet.

☝️ Not a design engineer

 

[Arndroid]

The price of band is literally roberry and misusing people.frankly I'm loosing my respect for Apple.I don't carewhat some sheep like fanboys will say but as much as I love Macs and despite my preference towards iOS,I found the watch absolutely rubbish and the new Macbook was also terrible.
they keep doing that(focusing on design and fashion and sacrificing functionality) and I will switch.and I'm sure a big number if fans will do the sane.

Is your claim the watch band is not functional?

 

[furi0usbee]

At those prices, Apple makes up R&D prices before you get to put your shiny new watch on your wrist. I don't begrudge companies from making as much profit as they can, but sometimes you just have to say, really? Would it have doomed Apple at $39 or even $29? Maybe I'd like to see some love for the consumer for a change, and not the investor. Apple is no different than any other corporation, it's just one corporation that happens to make products I like.

 

[furi0usbee]

Big difference when you're using expensive Swiss labor vs pennies on the dollar Chinese labor...

Great point! Apple is already playing dirty pool by using the cheapest labor possible, then jacking them up to prices as if they were "MADE IN THE USA." I'd pay $50 for a MADE IN THE USA band! Made in China, $29 sounds about right. I mean will Apple ever have enough money in the bank where they can give back a little to the consumer?

 

[MacBH928]

Introducing the world to OS X, streamlining the product line and killing the third party licensing of Mac OS Classic. Mainly OS X. They dropped the prices on their computers in the process. Those gawd awful Performa were selling for more than an iMac.

They started overcharging once they became the 800lb gorilla and their products became the "It."

Dunno why some folks complain about the price. It's what the market will bear. Enough folks are willing to pay that price that Apple is comfortable keeping that price.

Just trying to point out that Apple always charged a high premium. I was one of the people who always thought business sold their product at 20% profit. So a $2000 laptop costs $1600 to make or so. Now I know business have no problem selling 3x-7x the cost price.

 

[kdarling]

There's probably more engineering, design considerations and cost required on the sport strap than the similarly priced iphone case.

Can't be by much, since the design is old. See below.

I've since bought a couple of sport watch straps and find the material and comfort exceptional!

The material is synthetic rubber like many other sport bands before it. They all feel very similar to each other.

I wasn't a fan of the buckle originally but it's Apple so it has to be original, and it works very well in fact.

Hardly original. It's pretty much a duplicate of Marc Newson's late 1990s Ikepod watch sport bands.

So no, even the R&D argument... which could only account for a handful of cents per band anyway... doesn't carry much weight as far as price goes. It's more about Apple marching to the drumbeat of investors wanting constant profit growth.

 

[DarthMoops]

Exactly!

What about gas you put in your car? It's FREE - it comes from the ground - yet it's $3/gallon! The machinery to get the gas from the ground, and the refining process are all irrelevant, right? Because the ACTUAL cost of gas is nothing.

Greedy oil companies!

 

[thirteen1031]

$2!!!!! Jesus!!!

*SIGH!* 2$—estimated (meaning the person doesn't know this for a fact) and that's the cost of making the watch bands once they were devised, once machines were created to make them, etc. Meaning, the person is taking nothing else into account on pre-creation costs of these bands.

Note that I'm NOT justifying the price of the finished product. I just wish people would stop gasping in shock as if these bands were made by someone literally attaching rubber bands to paper clips. They weren't made without machines, were they? So what did those cost to make? And how did this person get to that estimate? What facts did they use? What did they include or not include?

And by the way, just because a product is inexpensive to make doesn't mean it can't be trusted to hold up. Consider cotton. Great material. Not expensive, but most cheap tees made of it will hold up and last. Speaking of which, are you not going to buy that $50 teeshirt with that special design—the one you've been lusting after--because it cost all of a dollar to make?

 

[thirteen1031]

Great point! Apple is already playing dirty pool by using the cheapest labor possible

No more dirty pool than any other computer company, and who is to blame for that? I remember when Apple was proudly made in the USA. But every other company was making computers in China for cheap. And that is what everyone bought. The cheap ones from China, not the higher priced ones from the USA. Apple was struggling and (this was after Jobs left) went to China, too, as it seemed the only way to stay afloat.

So. Yes. Companies are greedy. So are their stockholders. So are their customers who want to have it all but not pay much for it. That is why we're in this situation. If Americans (and the world) had not bought only cheap computers made in China, companies wouldn't have moved their operations there in the first place, and now find it hard to move them back without undermining the profits stockholders expect.

Which is to say, when you rant and rave about greedy corporations like Apple being in China, make sure to put yourself into the equation. They are there because American consumers wouldn't buy American. They wanted cheap instead. They still do (just look at clothing companies). As for Apple giving back to consumers: stockholders want their cut. And Wall Street decides the value of stocks according to how many billions a company makes. Until you change that method of valuing a company, then no. Apple will never make enough to give back to the customer.

 

[thirteen1031]

☝️ Not a design engineer

Is your claim the watch band is not functional?

Ha! Good points! I mean, come on people! Whatever else we do or don't know about these bands, we do know that Apple must have tested the hell out of them (which had to cost them something). Because the one thing they would not have wanted was for their new product to fall off wrists. They undoubtedly tested these bands under all sorts of conditions, including, as we know from one of their spokeswomen, on those running marathons.

Now, I'm sure someone will come up with a way to keep this watch on their wrist with literal rubber bands and paperclips, costing them all of 2 cents. But that doesn't mean I'm going to want to wear that band for hours a day, every day. Nor that I'm going to trust my $300-$500 wrist-computer to it.

Do you get what I'm saying? That Apple's R&D borrowed from other watch bands to create these I'll grant—and I've no problem with that. I mean, that's like kvetching that the black classic band isn't original. Duh. Why re-invent the wheel? If something works well, then for sure, borrow/copy/use it. But that band used as the model for the sports watch doesn't attach to its watch in the same way, doesn't need to keep its watch in contact with the skin to work, and, I suspect, wasn't made with running marathons in mind. So while the style is not original, R&D did have to do a few things to make sure the band did all all that and more—reliably and under a lot of different circumstances. This in addition to being wearable every day for hours on end.

So. Maybe R&D didn't just breeze though the process of creating those bands as so many here are suggesting. Maybe they did put in long hours, focused on tiny things like the holes, made adjustment and, again, tested the hell out of these bands. Maybe they did add a little to the cost. I'm not trying to justify the cost which I do think is too high...just pointing out that I don't think R&D's contribution was negligible or cost-free—and it doesn't seem right or fair to say it was.

 

[Benjamin Frost]

I saw an Apple Watch in the wild for the first time, today.

Unfortunately, the young guy was a complete douchebag. He was arguing loudly on his phone whilst ordering a drink at a café. He had the Apple Watch on his left wrist and a traditional watch on his right. He looked scruffy and wore an Abercrombie t-shirt.

Nuff said.