Margins lower than company average

Discussion in 'Apple Watch' started by KPOM, Apr 27, 2015.

  1. KPOM macrumors G5

    Joined:
    Oct 23, 2010
    #1
    At least right now. Some of that may be startup costs, etc, but it seems that Apple is selling this at less of a markup than its other products, and expects most of the sales to be of the lower-priced band/watch combinations.
     
  2. foxkoneko macrumors 6502

    Joined:
    Sep 5, 2011
    #2
    any actual evidence or just a random thought? :p
     
  3. JoEw macrumors 65816

    JoEw

    Joined:
    Nov 29, 2009
    #3
    I imagine there were significant R&D costs to get this category going.
     
  4. KPOM thread starter macrumors G5

    Joined:
    Oct 23, 2010
    #4
    Tim Cook said so on the earnings call.

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    R&D is a period expense. It doesn't affect gross margin (it does affect operating income, though). However, if they had higher setup costs for equipment and tooling, that could affect margin. Higher costs of goods sold (e.g. higher priced materials, higher labor costs) would affect margin, as well.
     
  5. sjinsjca macrumors 68000

    sjinsjca

    Joined:
    Oct 30, 2008
  6. KPOM thread starter macrumors G5

    Joined:
    Oct 23, 2010
    #6
  7. Patriot24 macrumors 68030

    Patriot24

    Joined:
    Dec 29, 2010
    Location:
    California
    #7
    Not surprising. New technology is more expensive to produce. Add premium materials like sapphire, ceramic, and gold into the mix, and you've got yourself some manufacturing costs.
     

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