Apple's Beats brand in April unveiled the Powerbeats Pro, a redesigned wire-free version of its popular fitness-oriented Powerbeats earbuds.
Apple Watch U.S. Sales Estimated at 2.8 Million, Sports Band May Have Base Cost of Just $2
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.
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.
Buyer's Guide: Apple Watch (Caution)
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55 months ago
If they only cost $2 to make, why don't some of you start making them tomorrow and sell them for a few bucks cheaper than Apple does? Think of all the money you'll make.
55 months ago
Another pointless bill of materials article. It's obvious that apple is making an absolute killing on the bands but the $2 figure is just ridiculous. It doesn't take into account other manufacturing costs such as tooling or machine design. It doesn't take into account any research and development costs, packaging, distribution, marketing and promotion etc. Apple are no doubt making a tidy profit off all the bands, not just the rubber ones but $2 is misleading and wrong.
55 months ago
The price of bands is just robbery.
It's not robbery when somebody CHOOSES to spend their money on something that they don't have to.
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.
55 months ago
Another pointless bill of materials article. It's obvious that apple is making an absolute killing on the bands but the $2 figure is just ridiculous. It doesn't take into account other manufacturing costs such as tooling or machine design. It doesn't take into account any research and development costs, packaging, distribution, marketing and promotion etc. Apple are no doubt making a tidy profit off all the bands, not just the rubber ones but $2 is misleading and wrong.
55 months ago
I must admit to be outraged by the cost of the watch. This information about the cost of the sports band vs the retail price simply adds insult to injury. My relationship with Apple has been seriously shaken by the Apple Watch affair. Although I have bought one, I feel very much less positively inclined towards Apple than I ever have in the past. This is a big change for someone who has been a big Apple advocate since 1990; one of the first with a mac.com email address. If I feel like this, I wonder how the less Apple-friendly types are feeling.
55 months ago
The price of bands is just robbery.
No, robbery is robbery – this is a purchase you can chose or chose not to make. There is no gun to your head, like an actual robbery. There will be third party bands soon enough but the put work into these and – like every other accessory they provide – there is a premium for theirs. However no one is requiring you to buy it.
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