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Just like cost to manufacture on iOS devices, the cost to manufacture one of these devices is going to be shockingly low. Like, under $100 for Sport.

R&D costs and whatnot will be replenished this way, but like someone above said, make no mistake about Apple earning a large margin on the devices themselves. Bands will add to that.
 
the more I see the more I get the angle apple is aiming with the sale of the apple watch. they want people to use it as a customizable fashion device... they want people to buy bands to change around and use as a fashion piece. hopefully the upgrades are incremental OS without the need to replace the actual hardware case. at least not until 2-3 yrs of life until redesign.

btw: what's the official OS is the apple watch running? applewatch OS?

It's running Watch OS:

http://en.wikipedia.org/wiki/Watch_OS
 
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