Apple Watch Sport: a production cost less than 85 dollars – The Echoes

The Apple Sport Watch (38 mm) is currently the Cupertino Product Group sold with the highest margin, according to data from IHS consultancy.

Apple’s art to generate buxom margins on its products is not new. As recently demonstrated by the iPhone 6, sold from 709 dollars “naked” – ie without a subscription – and whose production cost is estimated at less than $ 250 by the site Teardown.

But with his first shows connected, the Cupertino group would still pushed his own limits in terms of profitability, since Apple Sport Watch (38 mm) only cost 83.70 dollars to produce – for a $ 349 sale price (399 euros in France) – according to data from IHS consultancy.

According to IHS, the most expensive component for the firm at the apple is the screen supplied by LG Taiwanese company, which would return him to 20.50 dollars. The second would be the A1 processor, whose cost is estimated at 10.20 dollars him

Stronger margin of the group according to IHS

Result, Apple Sport Watch (38 mm) is the item with the highest margin for the group as the ratio of cost of production / sale price amounts to only 24%, while the usual range for Apple devices will be between 29% to 38%, if one refers to similar studies conducted by IHS .

Note however that the cost of production of smartwatch Apple does not include development costs (still high when it comes to a new range of devices, which is the case of Apple Watch) nor those of distribution or marketing (never negligible side the Cupertino).

This explains why during the presentation of quarterly results from Apple last week, Tim Cook claimed that the margin generated by Apple with his watch connected was lower than that achieved by the group throughout its range (40.8% gross margin in the first quarter). An incredibly high level for a hardware manufacturer .

Les Echos