It costs Apple less than $84 to produce an Apple Watch

Getting yourself an Apple Watch can cost anywhere from a few hundred to several thousand, depending on which one you get and where you get it from, but how much does it cost Apple to actually make one? Well, according to IHS Technology, it costs Apple a little under $84 to produce a single smartwatch, which means that less than a quarter of the smartwatch’s price goes towards covering the production costs. That’s a good number by any measurement. 

An Apple Watch will cost you a pretty penny. But what is Cupertino paying to manufacture them? About $83.70, according to IHS Technology, which tore down the 38mm Apple Watch Sport to determine its estimated bill of materials. In the end, about 24 percent of the suggested retail price of $349 goes toward hardware and manufacturing costs. Typical cost-to-MSRP ratios come in between 29 and 38 percent, the analytics team said. Note that these teardown assessments do not cover expenses such as software, licensing, royalties, or research and development. Apple has reportedly spent about $38 million on Apple Watch marketing. “It is fairly typical for a first-generation product rollout to have a higher retail price versus hardware cost,” Kevin Keller, senior principal analyst at IHS Technology, said in a statement. “While retail prices always tend to decrease over time, the ratio for the Apple Watch is lower than we saw for the iPhone 6 Plus and other new Apple products, and could be of great benefit to Apple’s bottom line if sales match the interest the Apple Watch has generated,” he said.