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.
"It's just a psychological thing," said Carolina Milanesi, chief of research and head of U.S. business at Kantar Worldpanel ComTech, a consumer research firm. "I start with the least investment, and then I spend more money, but I get something else."
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.
Top Rated Comments
A bag of potato chips costs $3. It takes about 5 potatoes at 20 cents each to make a bag of chips. That's $1 worth of potatoes. And they charge $3. That's a 300% profit! Is that robbery too?
Pretty much everything you look at is the same. A wooden chair costs $50, yet the price of it's wood is only about $4. A plastic chair costs $10, yet the price of it's plastic is less than 50 cents.
The materials that a product is made out of are not the primary cost to make something.