Apple Watch Teardown: How Much Does It Cost AAPL to Make One?

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The Apple Watch isn’t as expensive for Apple Inc. (NASDAQ:AAPL) to make as you may think.

AAPL stock
Source: Apple

A recent teardown of the Sport version of the Apple Watch was done by IHS Technology’s Teardown Mobile Handsets Intelligence Service. The company’s teardown revels that the price of the components in the smartwatch comes to $81.20. It estimates that manufacturing the devices costs an additional $2.50, bringing the total cost of the device to Apple to $83.70.

The Apple Watch Sport retails for $349.00. This means that the total cost of the device to Apple is only about 24% of the retail price. The Watch has many pieces of technology in it that have never been a part of a single device before. This could be why the company has marked the price up as much as it has.

“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 what 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.”

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Article printed from InvestorPlace Media, https://investorplace.com/2015/05/apple-watch-teardown-how-much-does-it-cost-aapl-to-make-one/.

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