Pricey gold Apple Watch could make $5 billion per quarter | Cult of Mac

Pricey gold Apple Watch could make $5 billion per quarter


The high-end Apple Watch Edition could bring in the bulk of Cupertino's revenue from wearables. Photo: Apple
Photo: Apple

The Apple Watch Edition has perplexed many Apple fanboys with its ridiculously high price tag. We still don’t know how much the beautiful, high-end smartwatch will cost, but it’s expected be one of the most expensive Apple products ever, which has a lot of analysts wondering, how many is Apple going sell?

The Wall Street Journal reported yesterday that only 17 percent of the first 5 million Apple Watch orders were for the pricey gold Edition. That number sounds almost insignificant, but Daring Fireball’s John Gruber did some math and found that Apple is expecting to sell about 1 million of the exorbitantly expensive timepieces per quarter.

Hitting 1 million in sales for the super-expensive smartwatches in the first quarter would be an impressive feat. But what’s more surprising is that if Apple actually hits that number, the gold Edition Apple Watches would account for the most Apple Watch revenue, bringing in at least $5 billion per quarter.

Here’s why:

“Apple Watch revenue will be dominated by the gold Edition units, accounting for double or more of the revenue from all the other models combined. The Edition models would thus do to the Apple Watch lineup as a whole what the iPhone, iPad, and Macintosh do to the entire phone, tablet, and PC industries, respectively: achieve a decided majority of the profits with a decided minority of the unit sales.”

According to Gruber’s estimates, if the average sale price of the Edition units is $5,000, that’s $5 billion in revenue per quarter — just from the gold models. If the price is $10,000 — which is totally possible — Apple Watch revenue would double.

Essentially, the gold Edition Apple Watch is the most important version of the new smartwatch if Apple wants to turn this into another multibillion-dollar profit source. The Sport edition is priced at $350 and will only make Apple $1 billion per quarter if they sell 3 million units. The stainless steel units could add an additional $2 billion per quarter if it’s priced around $1,000.

Source: Daring Fireball


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